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French Court Holds Recipient of Dividends May Claim a Foreign Tax Credit for 5% Add-Back Under Participation Exemption Regime

|Treaty Development|France-Italy
France-Italy

A recent decision of the Administrative Court of Appeal of Lyon was published on 27 January 2022 concerning the availability of foreign tax credit for dividends received that qualify for the French participation exemption. The case involved dividends received by a French company holding a qualifying participation in an Italian company, which were subject to withholding tax in Italy. Under the French participation exemption regime, the dividends were effectively 95% exempt with a taxable 5% p…

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