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Brussels, 20 November 2009

Direct taxation: The European Commission has asked France to abolish tax discrimination against foreign public-interest and not-for-profit bodies.

The European Commission has formally asked France to change its tax regime for donations to public-interest and not-for-profit bodies based in other EU or EEA Member States. France grants public bodies and public‑interest bodies, including charities, an exemption from dividend tax and transfer duties on donations only if they are established in France. In addition, France grants tax deductions to donors only for donations or contributions paid to not-for-profit bodies carrying out their activity in France. The Commission has sent the French authorities a ‘reasoned opinion’, which is the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. If France does not agree to amend its legislation within the two months following the Commission's letter, the Commission may decide to refer the matter to the European Court of Justice.

The French tax legislation currently in force lays down a system of exemptions for public bodies, public‑interest bodies based in France and not-for-profit bodies carrying out their activities in France from dividend tax and transfer duties on donations and bequests. By contrast, similar bodies established or active in the other EU and EEA Member States are subject to tax at 60% of the value of the donations or bequests received (calculated net of an allowance of € 1 520). However, by way of exception, some bilateral agreements entered into by France allow for the application of these tax advantages on a reciprocal basis.

There is also a fiscally advantageous regime for French taxpayers who make donations or contributions to public-interest bodies as defined by law that carry out their activities (philanthropic, cultural, religious, educational, etc.) in France.

According to Court of Justice case-law (particularly the judgment in Persche , C‑318/07 of 27 January 2009), the different tax regimes for donations to French bodies and those to foreign bodies constitute an unjustifiable barrier to the free movement of capital.

The reference numbers for the procedures initiated by the Commission are 2006/5003, 2007/4203 and 2007/4823.

For press releases concerning infringement procedures in the area of taxation and customs, please visit:

For further information on infringement procedures against the Member States, please visit:

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