Strategizing International Tax Best Practices – by Keith Brockman

The KPMG News Flash reveals: “The AG concluded that the French rules that allow a French parent company a full exemption in respect of dividends received from domestic subsidiaries under a group taxation regime, but effectively tax 5% of dividends received from shareholdings in EU subsidiaries, is in breach of the freedom of establishment. The CJEU now has to decide the case.”

It is hopeful the CJEU follows this legal conclusion, thereby restoring a consistent participation exemption regime in France for domestic and foreign subsidiaries.  Other Member States will also be following this case to the extent similar arrangements are in place.

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