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Transactions involving foreign securities with coupon payments: the French tax authorities bare their teeth.

Trades in which French resident taxpayers acquire or borrow foreign securities from an offshore shareholder shortly before a scheduled dividend distribution have attracted scrutiny from the French tax authorities in recent years. The economic purposes of such trades have been questioned inasmuch as the French entity receiving the dividend is entitled to a foreign tax credit compensating it for any withholding tax levied on that payment, before delivering the shares back to the offshore entity for a preset price reflecting a manufactured dividend. The very large international treaty network of France is probably one of the reasons why the French market has been rather active until recently…

Bertrand Lacombe

Lawyer at the Court, Lacombe Avocats

Experts de premier plan en droit fiscal