Your French company has made a profit, and you live abroad. You want that profit in your own account, as a dividend. Before you ask your accountant to wire anything, you need to understand two gates that stand between the profit shown in the accounts and the money that lands abroad. The first gate is French company law: a dividend is only lawful if the annual accounts show distributable sums and the shareholders have voted the distribution. The second gate is French tax law: the dividend is taxed at source in France before it leaves the country, under a withholding mechanism whose domestic rate is heavy, but which bilateral tax treaties and European Union law can cap or remove entirely. Each gate has its own paperwork, its own deadlines, and its own way of going wrong from a distance.
This guide walks foreign founders, foreign parent companies, and non-resident shareholders through the full chain: how a dividend is lawfully voted in a French SAS (société par actions simplifiée, the flexible joint-stock company most founders choose) or SARL (société à responsabilité limitée, the close limited-liability company), what makes a dividend fictitious and repayable, how the French withholding on outbound dividends works, when the European mother-subsidiary exemption brings it to zero, and how to recover overpaid withholding from abroad with the right forms and proofs. If you are still deciding which vehicle to use in France, read first our overview of how to choose between a SAS, a SARL, a branch and a subsidiary in France; if you want the tax background, see our guide to French corporate tax rates, instalments and filing for companies held from abroad. French acronyms are explained as they appear: Kbis (the official company identity extract issued by the greffe, the commercial court registry), CGI (Code général des impôts, the French tax code), IS (impôt sur les sociétés, corporate income tax), AG (assemblée générale, the shareholders meeting), and BODACC (Bulletin officiel des annonces civiles et commerciales, the gazette where company events are published).
I. Your French subsidiary can only pay you what French company law allows it to distribute
A dividend is not a bank transfer the director decides on a Friday afternoon. It is a legal act: the shareholders, voting on approved accounts, allocate to themselves a share of sums the law declares distributable. When the shareholder lives abroad and the French subsidiary is run day to day by a local manager or an accounting firm, the discipline of this vote matters even more, because errors are discovered late and corrections cross borders slowly. Everything in this first part conditions the second: tax can only be analysed on a dividend that was lawfully capable of being paid.
A. Only voted distributable profits can leave the company as dividends
The starting point is the definition of the distributable profit. Article L232-11 of the Commercial Code builds it layer by layer: the profit of the financial year, minus prior losses and minus the sums that must go to reserves under the law or the articles, plus any retained earnings carried forward (report bénéficiaire). The shareholders may also decide to distribute sums taken from reserves at their disposal, but the decision must then state expressly from which reserve headings the sums are taken, and dividends are taken first from the distributable profit of the year. No distribution is allowed, outside a capital reduction, if the net equity would fall below the share capital plus the non-distributable reserves. The revaluation surplus is never distributable. In plain terms: you cannot distribute what the balance sheet does not show as available, you cannot quietly dip into reserves without saying which ones, and you cannot empty the company below its legal floor.
The vote itself belongs to the shareholders after they approve the annual accounts. Article L232-12 of the Commercial Code states that: “Après approbation des comptes annuels et constatation de l’existence de sommes distribuables, l’assemblée générale détermine la part attribuée aux associés sous forme de dividendes.” In English: after the annual accounts are approved and the existence of distributable sums is recorded, the shareholders meeting determines the share allocated to the shareholders as dividends. For a foreign founder this sentence carries three practical commands. First, approve the accounts first, in a proper meeting with minutes, even in a one-shareholder SAS where you sign the sole-shareholder decision yourself. Second, record the existence and the amount of distributable sums in that decision, with the figures. Third, fix the dividend per share, the payment date, and the payment method. From abroad, hold the meeting by videoconference or written consultation if your articles allow it, keep the signed minutes with the accounts, and have the French accountant reconcile the voted amount with the bank transfer before it leaves.
Cash needs do not always wait for the annual meeting, and the law provides one ordered shortcut: interim dividends (acomptes sur dividendes). The same Article L232-12 allows them only when an interim balance sheet, drawn up during or at the end of the financial year and certified by a statutory auditor (commissaire aux comptes, the independent auditor appointed above certain thresholds), shows that since the previous year-end, after depreciation, provisions, prior losses, legal and statutory reserve allocations and retained earnings, the company has earned a profit. The interim payments cannot exceed that profit, and their allocation follows conditions set by decree. For a small subsidiary with no statutory auditor, this route is simply closed: no certification, no interim dividend. Foreign founders who press a local manager to pay an advance on profits without this document are manufacturing the exact object the next section describes.
A numerical example fixes the mechanics. Suppose your SAS closed the year with a profit of 120,000 euros, prior losses of 20,000 euros, a legal reserve allocation of 5,000 euros, and retained earnings of 15,000 euros. The distributable profit is 120,000 minus 20,000 minus 5,000 plus 15,000, which is 110,000 euros. The shareholders can vote a dividend up to 110,000 euros, or vote less and carry the rest forward. If they also want to distribute 30,000 euros from an available optional reserve, the decision must name that reserve expressly. What they cannot do is vote 150,000 euros because the group needs cash, or distribute the revaluation surplus, or let equity fall below capital plus non-distributable reserves. The accountant who prepares form 2777-SD for the withholding, discussed in Part II, works from this voted figure; an unlawful vote poisons the whole chain.
Two formalities often neglected from abroad deserve a warning. First, the articles of the SAS or SARL may restrict distributions, impose approval clauses, or allocate a priority dividend to a class of shares: read them before voting, because the articles bind the shareholders even when everyone agrees on the amount. Second, regulated paperwork follows the money: the approved accounts must be filed with the greffe within the legal time limits, the dividend decision must be kept with the company registers, and the Kbis must reflect the current directors who sign. A foreign shareholder who cannot produce signed minutes, approved accounts, and proof of filing will struggle at the first tax audit or the first bank compliance check on the outbound wire.
B. A dividend paid without distributable profits is fictitious and must be repaid
The sanction is written in one sentence at the end of Article L232-12 of the Commercial Code: “Tout dividende distribué en violation des règles ci-dessus énoncées est un dividende fictif.” Any dividend distributed in breach of the rules stated above is a fictitious dividend. The word fictitious does not mean the money did not move; it means the money moved without a legal basis, and the law treats it as an undue payment that must return. Shareholders who received fictitious dividends must repay them when the distribution was made in breach of the rules, and directors who organised the payment face civil liability toward the company and, in serious cases, criminal exposure for presenting inaccurate accounts or using company assets against its interest. From abroad, the non-resident shareholder is not shielded by distance: the repayment claim follows the recipient of the funds.
The courts apply this strictly, including inside family and closely held companies where everyone supposedly agreed. In a Paris ruling of 10 January 2023 concerning a taxi company, the court recalled the articles of the then-applicable company law requiring proper accounts and a shareholders decision fixing each shareholder’s dividend share, and restated that any dividend distributed in breach of those rules is a fictitious dividend, while rejecting a claim for dividends that no shareholders decision had ever voted. The full decision is published under number 21/02349 before the Paris Court of Appeal. The lesson for foreign founders is direct: no vote, no dividend, even if you own one hundred percent of the shares. Sign the decision, or the payment is an advance with no title, repayable on demand by a liquidator, a new co-shareholder, or the tax administration recharacterising it.
Repayment is not the only risk. A fictitious dividend can be recharacterised for tax purposes as a disguised distribution or as management remuneration, taxed differently and stripped of the treaty and European reliefs described in Part II, which apply to genuine dividends only. It can support a claim for director misconduct (faute de gestion) in a later insolvency, where a court examines whether the directors kept proper accounts and respected the distribution rules. And it destroys the withholding-recovery file: the forms 5000 and 5001 and the residence certificates only recover tax levied on real dividends, and a tax administration that discovers the distribution had no legal basis will refuse the refund and may assess penalties. The cheapest protection remains procedural: approve, record, vote, file, then pay, in that order, with the auditor’s certification whenever the law requires one.
For the founder who lives abroad, organise the evidence as a pack before the wire leaves France. The pack contains the signed annual accounts, the shareholders decision approving them and voting the dividend with exact figures, the interim certified balance sheet if interim dividends were paid, proof of filing with the greffe, the bank statement showing the transfer labelled as dividend for the voted year, and the withholding declaration discussed below. Keep this pack for the full retention period, because a challenge to a dividend can arrive years later through an audit, a shareholder dispute, or an insolvency. A lawful vote documented from day one turns every later discussion, with a bank, a treaty partner administration, or a judge, into a presentation of papers rather than a reconstruction of memory.
II. France taxes the dividend at source before it reaches your foreign account, but treaties and EU law cap or erase that tax
Once the dividend is lawfully voted, France taxes it before it crosses the border. The mechanism is a withholding at source (retenue à la source): the French paying company, not the foreign recipient, calculates the tax, declares it, pays it to the French Treasury, and wires only the net to the shareholder abroad. The domestic rates are deliberately dissuasive, but they are ceilings, not destinies. Bilateral tax treaties signed by France cap the French tax on dividends paid to residents of the partner state, and European law can remove it entirely for qualifying parent companies. The rest of this part explains the domestic charge, the treaty caps with their forms and proofs, the European exemption with its strict conditions, and the recovery procedure when too much was withheld.
A. French withholding applies first, at heavy domestic rates, through the paying company
The charging provision is Article 119 bis of the Tax Code (CGI), which provides that: “Les produits visés aux articles 108 à 117 bis donnent lieu à l’application d’une retenue à la source dont le taux est fixé par l’article 187 lorsque leurs bénéficiaires effectifs sont des personnes qui n’ont pas leur domicile fiscal ou leur siège en France”. In English: income covered by Articles 108 to 117 bis, which includes dividends, is subject to a withholding whose rate is set by Article 187 when the beneficial owners are persons with neither their tax domicile nor their seat in France. Three ideas matter here. First, the tax hits dividends paid to non-residents, individuals and companies alike. Second, the person who pays the tax to the Treasury is the French distributing company, through its declaration, which is why your French accountant, not you, files it. Third, the decisive person is the beneficial owner (bénéficiaire effectif), the one who truly receives and enjoys the dividend, not a mere intermediary or conduit inserted in the chain.
The rates are set by Article 187 of the Tax Code, which for dividends refers companies to the standard corporate tax scale: “Celui prévu au deuxième alinéa du I de l’article 219 pour tous les autres revenus.” That cross-reference means, in current conditions, a domestic withholding on dividends paid to foreign companies aligned with the standard French corporate rate, while the same Article 187 fixes 12.8% for individual beneficiaries and 75% for payments routed through non-cooperative states or territories. Individuals resident in France face a different but neighbouring mechanism, the 12.8% non-final levy of Article 117 quater of the Tax Code, which is presented here only to avoid confusion: as a non-resident, your dividend goes through Article 119 bis withholding, not through the resident levy. The practical consequence is stark. A 100,000 euro dividend voted to a foreign parent can suffer a heavy French withholding at the domestic rate if no treaty or European relief is claimed, which is why the declaration must apply the correct reduced rate from the start rather than paying full rate and hoping.
The declaration is form 2777-SD, filed electronically with electronic payment by the French payer. The tax administration presents form 2777-SD for income from movable capital, levy and withholding at source as the mandatory channel: it must now be filed online with the matching online payment. In the return, the payer selects the applicable rate heading according to whether a treaty applies. A recent Paris decision shows exactly how this choice becomes a professional-liability trap. In a ruling of 15 September 2026 (RG 24/06926), the Paris Court of Appeal recorded that: “l’article 119 bis 2 du code général des impôts prévoit une retenue à la source, au niveau de la société, sur les revenus de capitaux mobiliers distribués à des non-résidents”. The court described how the distributing company must determine and apply the right rate among those offered in the form 2777 return depending on whether an international tax treaty applies. In that case, dividends paid to a shareholder resident in Spain between 2012 and 2017 had suffered 21% instead of the treaty rate of 15%, and the court examined the accounting firm’s duty of advice over that error across several years. The full ruling is published at Paris Court of Appeal, 15 September 2026, RG 24/06926. For the foreign founder, the message is that the rate applied on form 2777 is a legal determination, not a default setting, and the file must show why the chosen rate was the treaty rate.
The treaty cap itself works through the beneficial-owner test and the residence proof. The same Paris ruling summarises the treaty logic as follows: dividends paid by a French-resident company to a Spanish resident are taxable in Spain, and also taxable in France, with the treaty capping the French tax at 15% of the gross dividend where the recipient is the beneficial owner. The 15% figure is the France-Spain treaty outcome applied in that case; your own cap depends on your treaty. France has treaties with the United States, the United Kingdom, and most states where founders live, and each treaty sets its own dividend article with its own rates and holding thresholds. The procedure to obtain the treaty rate at source runs through residence certification: the foreign shareholder provides the French payer with proof of residence, commonly through form 5000-SD, the residence certificate for the foreign administration, completed with the help of the residence state’s tax authority, so the payer can lawfully apply the reduced treaty rate on form 2777 instead of the domestic rate. Without that proof in hand at payment time, the payer must withhold at the domestic rate, and the treaty benefit shifts to a later refund claim.
B. European parent companies can reach zero withholding, and anyone overtaxed can claim the excess back
For corporate shareholders inside the European Union and the European Economic Area, the treaty is not the ceiling: an exemption can bring French withholding to zero. Article 119 ter of the Tax Code states that: “La retenue à la source prévue au 2 de l’article 119 bis n’est pas applicable aux dividendes distribués à une personne morale qui remplit les conditions énumérées au 2 du présent article par une société ou un organisme soumis à l’impôt sur les sociétés au taux normal.” The withholding under Article 119 bis(2) does not apply to dividends paid by a company subject to corporate tax at the standard rate to a legal person meeting the listed conditions. Those conditions are cumulative and demanding: effective management seat in an EU or EEA state that has an administrative-assistance treaty with France, a qualifying corporate form under the EU mother-subsidiary directive 2011/96/EU or an equivalent, a holding of at least 10% of the distributing company’s capital held directly, uninterrupted for two years or more in full or bare ownership, with a commitment mechanism and a tax representative if the two years are not yet complete, and liability to corporate tax in the home state without option or exemption. The holding test, in the article’s own words, requires the parent to: “Détenir directement, de façon ininterrompue depuis deux ans ou plus et en pleine propriété ou en nue-propriété, 10 % au moins du capital de la personne morale qui distribue les dividendes”. A German, Dutch, Spanish or Irish parent holding 10% of your SAS for two continuous years and subject to its home corporate tax can therefore receive the French dividend with no French withholding at all, provided it proves beneficial ownership and each condition to the French payer before payment.
Two warnings frame this exemption. First, it has an anti-abuse lock: it does not apply to dividends paid within an arrangement, or series of arrangements, put in place with a main purpose of obtaining a tax advantage contrary to the provision’s object, where the arrangement is not genuine in light of all relevant facts, meaning it was not set up for valid commercial reasons reflecting economic reality. A holding company created weeks before the dividend, with no staff, no premises, no activity, and no reason to exist except intercepting the dividend, will not survive this test. Build substance before claiming zero: real seat of management, real activity or real holding function, documented commercial reasons for the French investment, and a paper trail showing the parent actually enjoys and decides over the dividend. Second, the exemption is a withholding exemption in France, not a worldwide tax holiday: the dividend remains taxable in the parent’s home state under its own rules, with its own mother-subsidiary regime. France aligning its domestic mother-daughter relief through Article 145 of the Tax Code and Article 216 of the Tax Code concerns French parents receiving dividends; your foreign parent looks to its own state’s participation-exemption for the second half of the equation.
When the full rate was withheld but a treaty or the exemption should have applied, the remedy is a refund claim filed from abroad. The standard path combines the treaty forms with the general tax-claim procedure. The foreign shareholder completes form 5000 with its home tax authority and, depending on the administration’s guidance for the year concerned, the dividend-specific reclaim form 5001 with the computation of the refundable excess, attaches the dividend vouchers, the form 2777 receipt showing the tax withheld, bank proof of the net payment and the withholding, the residence certificate, and for a European parent the proof of each Article 119 ter condition including the holding duration and corporate-tax liability. The claim is a contentious tax claim: Article L190 of the Tax Procedure Book assigns to the contentious jurisdiction the claims seeking repair of assessment errors or the benefit of a right under legislation, which is exactly what a treaty-based refund is. File early, inside the applicable claim time limits shown on the forms and notices, keep proof of dispatch, and calendar the administration’s reply: silence then opens the path to the administrative court, while a refusal must be challenged within its own appeal period. From abroad, appoint a French correspondent or representative for service of documents so a request for additional proof does not die in an unmonitored mailbox.
Run the numbers before deciding whether to claim at source or by refund. Take a 200,000 euro dividend voted to a foreign corporate parent. At a domestic withholding aligned with the standard corporate scale, the French tax retained can approach a quarter of the gross, leaving roughly three quarters wired abroad and a large reclaim file to rebuild later. Under a 15% treaty rate with residence proof supplied before payment, the French tax is 30,000 euros and the net wired is 170,000 euros, with no refund needed. Under the Article 119 ter exemption for a qualifying European parent, the French tax is zero and the full 200,000 euros is wired, taxed only at home. The ranking is always the same: exemption at source first, treaty rate at source second, domestic rate plus later refund last. The Paris 2026 case is the cautionary tale for choosing the last option by neglect: years of dividends at 21% instead of 15%, discovered long after, turned into a damages action against the adviser, when timely residence certificates would have secured the treaty rate on each form 2777 from the start.
Close the file with controls a founder living abroad can operate without flying to France. Before payment, confirm the voted distributable amount, the applicable domestic rate, the treaty article and rate for your state of residence, or the Article 119 ter conditions with their proofs, and instruct the payer in writing which rate to apply and on which documents. At payment, collect the signed minutes, the dividend voucher, the form 2777 receipt, and the bank records on the same day. After payment, reconcile the net received with the gross voted minus the stated withholding, file the home-state return reporting the dividend with the French tax credited or exempted as local law provides, and diary the reclaim deadline even when everything looked right, because a bank or payer error can surface months later. When a treaty benefit was missed, assemble the refund pack immediately rather than waiting for the next dividend: each distribution has its own clock, and a late claim for one year does not borrow time from the next.
Conclusion
A dividend from your French subsidiary to your foreign account succeeds when two disciplines meet. Company law supplies the object: approved accounts, recorded distributable sums, a shareholders vote fixing the dividend, and no payment beyond what the balance sheet allows, on pain of fictitious-dividend repayment. Tax law supplies the route: French withholding at source under Article 119 bis at the domestic scale of Article 187, reduced at payment by the treaty rate once residence and beneficial ownership are proved, or removed entirely by the Article 119 ter exemption for a qualifying European parent holding at least 10% for two uninterrupted years. The Paris courts have shown both ends of the chain within months of each other: dividends without a vote fail as fictitious, and dividends at the wrong withholding rate become multi-year losses that end in court. Vote first, certify residence early, claim the treaty or the exemption at source, keep the minutes with the forms, and calendar every reclaim deadline. Handled in that order, the profit your French company earned becomes money you actually receive, with French tax limited to what France is truly entitled to keep.