French real estate capital gains realised by non-residents are subject to a withholding tax of 33.1/3% subsequently creditable against French CIT.
With the new Finance Act for 2017, however, the standard French CIT rate will progressively decrease to 28% over the period from 2017 to 2020.
This decrease is expected to affect the withholding tax rate. However, under a strict reading of the referral made by article 244 bis A of the French tax Code to the standard rate of corporate income tax, the 33.1/3% rate should remain applicable to non-residents until fiscal year ended 31 December 2019.
The question then arises as to whether the progressive decrease in rate can still apply and how, to companies that, if established in France, would meet the criteria for benefiting from the reduced rate.