The French tax authorities on 6 October 2021 published the long-awaited amended administrative guidelines on the exemption from dividend withholding tax for nonresident collective investment vehicles (CIVs).
The new guidelines provide additional procedural details and conditions for all funds, and in particular non-EU funds, to apply for a refund and to benefit from the withholding tax exemption at source. The key updates made by the guidelines are summarized below.
Refund procedure
Form BOI-FORM-000037, BOI-FORM-000086, BOI-FORM-000089, or BOI-FORM-000092, as appropriate, must be completed and attached to the withholding tax refund application, together with supporting documentation.
Procedure to benefit from exemption at source
EU funds
EU funds still need to fill in the appropriate form (BOI-FORM-000037 or BOI-FORM-000086) and submit it to their custodian/paying agent once, until a change of circumstances. The guidelines confirm that all forms should be completed for each sub-fund. In the event of a change of circumstances, the fund or its representatives should inform the paying agent immediately.
Non-EU funds
The application for exemption is not theoretically subject to a positive decision anymore. The guidelines indicate that, if all conditions are met, form BOI-FORM-000089 or BOI-FORM-000092 should be submitted to the paying agent together with the supporting documentation establishing that all conditions are met. If the paying agent is satisfied that all conditions are met, the exemption at source should apply.
Possibility of ruling request
The new guidelines also open the possibility of a formal ruling request to confirm eligibility for the exemption prior to applying the exemption at source. This applies to claims/exemptions going forward and is not applicable to historic claims.
If the fund has already obtained a ruling or a positive decision
Box III of BOI-FORM-000092 (“sworn statement”) should be filed once a year with the paying agent in order to obtain exemption at source. This will cover all dividends paid in a calendar year. Any changes in circumstances during the year should be flagged to the paying agent.
UK funds
UK funds are now treated as third country funds and should follow the same procedure. However, for funds created before 1 January 2021 that already benefit from exemption at source, the exemption can continue to apply based on the annual filing of form BOI-FORM 000089 or BOI-FORM-000092 with their custodian/paying agent. This form will act as an affidavit/“sworn statement” from the fund/management company that the fund continues to meet all conditions to benefit from the exemption. For these funds, the refund decision from the tax authorities does not have to be attached to the form. Any changes in the situation and features of the fund should be flagged to the paying agent so that the paying agent can start levying withholding tax if required by the change in the fund’s circumstances.
