French General Tax Code
In force1. a) Upon justification, the withholding tax to which the income from transferable securities, referred to in the articles 108 to 119,238 septies Band 1678 bis, received by the company or legal person shall be deducted from the amount of tax payable by it under this chapter.
However, the deduction to be made in this respect may not exceed the fraction of the latter tax corresponding to the amount of the said income.
Where this income is received in respect of property or rights previously held by the person, or another person related to him within the meaning of 12 de l'article 39, who, in the contract which conferred on the taxpayer the holding of these assets or rights or in a contract relating thereto, has undertaken to regain ownership or has reserved the right to regain ownership at a later date, this amount is reduced by expenses incurred for the acquisition of this income by the taxpayer and persons connected with him, including:
- capital losses on the disposal of these assets or rights;
- sums, other than the acquisition price of these assets or rights, paid to this other person or persons related to him, within the meaning of 12 of article 39.
However, the third to fifth paragraphs of this a do not apply if the taxpayer provides proof that the main purpose or effect of entering into the contract was not to enable it to benefit from the tax credit.
b) With regard to the foreign source income referred to in articles 120 to 123, the deduction is limited to the amount of the credit corresponding to the tax withheld at source abroad or the discount in lieu thereof, as provided for by international conventions.
c) With regard to dividends and income distributed by the investment companies referred to in 1° bis and 1° bis A of article 208 and the venture capital companies referred to in 3° septies of the same article in respect of the previous financial year, the shareholding company or legal entity is entitled to the allocation of a share of the total amount of the tax credits attached to the portfolio income received, during this financial year, by the distributing company. The entitlement of each company or legal entity shareholder is determined in proportion to its share of the dividends distributed in respect of the same financial year. It may not exceed that normally attached to income distributed by ordinary French companies. The amount to be deducted is included in the corporate income tax base.
When investment companies eligible for the regime provided for in 1° and 1° bis A of l'article 208 may not transfer to their shareholders all or part of the tax credits attached to the income from their portfolio received during a financial year, the unused credits may be carried over to the next four financial years. This provision applies to tax credits relating to income received during financial years opened after 31 December 1966.
2. (Obsolete provision).
3. (Repealed)
4. The provisions of 1 shall not apply to public establishments, associations and other bodies taxed under 5 of Article 206. They are also not applicable to income deductible from net profit under I of Article 216.
4. bis (Not applicable).
5. The conditions for the application of 1 shall be laid down by decree in the Conseil d'Etat.
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