!css
16/05/2012

Decision of the European Court of Justice on UCITS taxation

The European Court of Justice has ruled in favour of foreign funds that disputed the withholding tax applied under French law.

The European Court of Justice has ruled in favour of foreign funds that disputed the withholding tax applied under French law. European Union law opposes French legislation instituting a different tax treatment depending on whether dividends from a French source are received by resident or non-resident UCITS

The European Court of Justice has decided that the 25% withholding tax (30% since 1 January 2012) deducted by France on dividends paid to foreign UCITS is contrary to EU law, as it institutes a different tax treatment depending on whether UCITS are residents or non-residents.

At the end of 2011, around 2,500 withholding tax reclaims were presented before the Administrative Lower Court of Montreuil. The Court then referred 10 cases to France's Supreme Administrative Court (including Santander AM, Allianz Global Investors, KBC, Generali, and Societe Generale funds). These foreign UCITS had invested in shares of French companies, and thus incurred this withholding tax on dividends paid to them, disputed the French legislation by alleging discrimination with regard to the free movement of capital guaranteed by EU law.

In view of this decision, the public authorities have a choice between two points of view:
1/ Elimination of the withholding tax to the sole benefit of foreign UCITS, with a need to offset the fiscal loss resulting from this elimination.
2/ Expansion of application of the withholding tax to all shareholders, both French and foreign.

In this second case, the performance of French funds would be impacted, as the dividends would be taxed at the rate in effect. This disadvantage could be partially made up for, as other countries of the European Union are also affected (Germany, for example). But the risk would be to favour foreign shareholders and further increase non-resident holding of the capital of French companies.

The withholding to be reimbursed by the Public Treasury in accordance with this decision is expected to total ?4.2 billion, and the annual cost of eliminating the withholding should amount to around ?1 billion per year.


SGSS will work with its clients to deal with the consequences of this decision, the details and procedures of which are not yet known.

dic
2016
Altana Wealth Limited selects SGSS in Ireland for its UCITS fund structure
Altana Wealth Limited in the United Kingdom has appointed Societe Generale Securities Services (SGSS) in Ireland to...
nov
2016
Vatel Capital appoints SGSS to provide custody, depositary bank and valuation services
Introduced by the Finance Law in 2007, FIP Corse is a local investment fund of which 70% of its assets are invested in...
SGSS
Introduced by the Finance Law in 2007, FIP Corse is a local investment fund of which 70% of its assets are invested in small and medium-size enterprises on the French island of Corsica. The purpose of FIP Kallisté Capital n°9 is to invest in Corsican SMEs whose main activities are in the tourism, renewable energy, health and dependency, agro-food or business...
it/area-stampa-agenda/news/comunicati-stampa/news/vatel-capital-retient-sgss-pour-fournir-des-services-conservation-banque-depositaire-valorisation/
nov
2016
SFIL appoints SGSS for global custody services
SFIL, the leading French local public sector and export financing agency, and CAFFIL, a French specialized credit...
SGSS
SFIL, the leading French local public sector and export financing agency, and CAFFIL, a French specialized credit institution (société de crédit foncier), have mandated Societe Generale Securities Services (SGSS) to provide global custody services for their public sector assets in Europe. This extends an existing mandate for valuation services with SFIL in...
it/area-stampa-agenda/news/comunicati-stampa/news/sfil-appoints-sgss-for-global-custody-services/
nov
2016
Eurotunnel retains SGSS for its issuer services
Eurotunnel has appointed Societe Generale Securities Services (SGSS) to provide shareholder services which include share...
SGSS
Eurotunnel has appointed Societe Generale Securities Services (SGSS) to provide shareholder services which include share registry services, centralised financial services and shareholder meeting services for its 27,000 registered shareholders in France and the United Kingdom.
it/area-stampa-agenda/news/comunicati-stampa/news/eurotunnel-retains-sgss-for-its-issuer-services/
nov
2016
Quarterly Financial Information
Q3 16: Sound Commercial And Financial Performance
ott
2016
Societe Generale Securities Services strengthens its teams in India and Poland
Societe Generale Securities Services (SGSS) announces the following appointments: David Jaegly has been appointed...
set
2016
SGSS appoints new Global Head of Sub-Custody Network Management
Societe Generale Securities Services (SGSS) has appointed Massimiliano Notarianni as Global Head of Sub-Custody Network...
set
2016
SGSS mandated by KELER, the Hungarian central securities depository
Societe Generale Securities Services (SGSS) has been mandated by KELER, the Hungarian central securities depository, to...
set
2016
Societe Generale present at Sibos 2016
Societe Generale is exhibiting at SIBOS 2016 in Geneva this year, from 26 to 29 September, to showcase its broad range...