France: CJEU rules on 3% contribution on distributed profits

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In France, companies subject to Corporate Income Tax (CIT) are required to pay an additional CIT contribution of 3% on the distributed profits according to article 235 ter ZCA of the French general tax law.

But, the Court of Justice of the European Union (CJEU) issued a judgment on 17 May 2017, ruling that the 3% contribution on distributed profits is not compatible with article 4-1 of the European Union (EU) Parent-Subsidiary Directive (PSD) when the parent company makes the redistribution of the dividends received from its subsidiaries.

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