French General Tax Code
In forceI.-The beneficiary of income and profits subject to withholding or deductions at source mentioned in articles 119 bis, 182 A bis, 182 B, 244 bis, 244 bis A and 244 bis B may request that the tax paid pursuant to these articles be refunded when the following conditions are met:
1° The beneficiary of the income and profits is a legal entity or a body, whatever its form, whose registered office or permanent establishment, in the results of which the income and profits are included, is located in a Member State of the European Union or in another State party to the Agreement on the European Economic Area which has concluded with France an administrative assistance agreement to combat tax fraud and tax evasion as well as a mutual assistance agreement on recovery with a scope similar to that provided for by Council Directive 2010/24/EU of 16 March 2010 on mutual assistance for the recovery of claims relating to taxes, taxes, duties and other measures and is not non-cooperative within the meaning of Article 238-0 A or, for the withholding taxes provided for in Article 119 bis, in a State which is not a member of the European Union or which is not a State party to the Agreement on the European Economic Area which has entered into the agreements referred to in this 1° with France, provided that this State is not non-cooperative within the meaning of Article 238-0 A and that the shareholding held in the distributing company or body does not enable the beneficiary to participate effectively in the management or control of that company or body ;
2° Its taxable income, calculated in accordance with the rules applicable in the State or territory in which its registered office or permanent establishment is located, is in deficit in respect of the financial year during which the income and profits referred to in the first paragraph of this I are received or realised, as the case may be.
The loss-making result is calculated by taking into account the income and profits whose taxation is the subject of a restitution request in respect of this financial year and the income and profits mentioned in the same first paragraph having given right to a restitution in respect of previous financial years, where the deferral of taxation mentioned in II is still in progress.
II.-The refund provided for in I of the sums withheld or deducted in application of articles 119 bis, 182 A bis, 182 B, 244 bis, 244 bis A and 244 bis B gives rise to taxation of the income and profits mentioned in I. This is calculated by applying to this income and profits the rules governing the basis of assessment and rates provided for, as appropriate, in articles 119 bis, 182 A bis, 182 B, 244 bis, 244 bis A and 244 bis B in force on the date of the chargeable event for the deductions and levies refunded. It is payable by the beneficiary of the income and profits mentioned in I and is subject to a deferral.
The taxation mentioned in the first paragraph of this II is established, controlled and collected like corporation tax and under the same guarantees and sanctions.
III.-The refund and deferral referred to in the first paragraph of II are subject to the beneficiary of the income and profits referred to in I filing a declaration with the non-resident tax department within the time limit set for claims relating to taxes other than local taxes and taxes ancillary to these taxes. This declaration indicates the identity and address of the beneficiary as well as the amount of the deficit determined in application of 2° of I.
IV.-The taxation and deferral mentioned in the first paragraph of II take effect on the date of filing of the declaration mentioned in III. The deferral is maintained for each of the financial years following that in respect of which the declaration mentioned in III was filed by the beneficiary, provided that the beneficiary files a declaration with the non-resident tax department, in respect of each of these financial years, showing a deficit result determined in application of 2° of I within six months of the end of the financial year.
A statement tracking the income and profits whose taxation is deferred pursuant to the first paragraph of II is appended to the declarations mentioned in III and the first paragraph of this IV on a form complying with the model established by the administration.
When the beneficiary has not filed the declaration or statement referred to in the first two paragraphs of this IV within the time limit stipulated in the first paragraph or has filed an incomplete declaration or statement, the tax authorities will send him formal notice to comply with the declaration obligations incumbent upon him pursuant to this IV within a period of thirty days, specifying, where applicable, the additional declarations required. Failure to comply with the reporting obligations following this formal notice shall result in the termination of the tax deferral pursuant to 3° of V.
Failure by the beneficiary to comply with its reporting obligations following receipt of the formal notice provided for in the third paragraph of this IV and within the thirty-day period provided for therein shall result in the application of a fine, payable by the beneficiary, equal to 5% of the taxes placed in deferral on the date of the failure referred to in the same third paragraph.
V.-.The tax deferral referred to in II is terminated when:
1° The declaration provided for in the first paragraph of IV shows a profit;
2° The beneficiary of the income and profits referred to in I is the subject of a transaction resulting in its dissolution without liquidation, unless its deficits as defined in 2° of I are transferred to the absorbing company or the beneficiary of the contributions, and the latter undertakes to file a declaration under the conditions of IV.
In the absence of a transfer of the deficits of the company being dissolved without liquidation and if the last return filed by this company under the conditions provided for in III or IV shows a deficit result determined pursuant to 2° of I, the taxation placed in deferral under the conditions provided for in II is subject to a relief ;
3° The beneficiary of the income and profits mentioned in I has not complied with the obligations set out in IV within thirty days of receiving the formal notice mentioned in the last paragraph of the same IV.
The amount of income and profits in respect of which the deferral is terminated pursuant to 1° of this V is retained only up to the limit of the profit referred to in the same 1°.
The taxation referred to in II is due as from the end of the deferral, which entails its immediate payability.
Where the taxes deferred pursuant to the same II relate to separate financial years, the forfeiture of this deferral applies in priority to the oldest taxes.
