The requirement for an actual place of business set forth in Article 119 ter overturned by the Nantes Administrative Court of Appeal
A company underwent an audit, following whichadministration the withholding tax exemption applied to a dividend distribution to its parent company located in Belgium.
Theadministration that:
the company had not provided evidence that the parent company’s actual place of management was in Belgium;
The company had not submitted the CERFA 5000-FR form, which would confirm the parent company's tax residence in Belgium.
With regard to the first ground of appeal, the Court notes that the requirement that the parent company have its effective center of management is not included in the Parent-Subsidiary Directive. It holds that, for the dividend to be exempt from withholding tax, the directive requires only that the parent company “be regarded, under the tax legislation of the Member State concerned, as having its tax residence there.”
The Court will then adopt a restrictive interpretation of Article 119b, holding that in order to qualify for the withholding tax exemption, the parent company “must, in particular, have its tax residence in a Member State of the European Union under the tax laws of that State and not be regarded as having its tax residence outside the European Union under a treaty concluded with a third country to prevent double taxation.”
The requirement that there be an actual headquarters is waived.
Regarding the failure to submit Form CERFA 5000-FR, the Court will rule "that no provision requires, on pain of forfeiture of the withholding tax exemption provided for in Article 119 ter(1) of the General Tax Code, the filing of the Cerfa 5000-FR form endorsed by the Belgian tax authorities, which it had required to be submitted."
The Administrative Court's previous decision to set aside the reassessment is upheld.
CAA Nantes, Oct. 7, 2025, No. 24NT02819
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