Concerning French direct tax, note that the France-United Kingdom income tax treaty provides for a 0% withholding tax on dividends (to the extent that the beneficiary is a company holding at least 10% of the share capital of the distributing company; otherwise a 15% withholding tax applies), royalties, and interest.
A tax-free merger could no longer be implemented between French and UK corporations, and disputes between the taxing authorities of the two Contracting States would have to be resolved through the provisions of the treaty and, if need be, through arbitration.
UK voters decided on 23 June 2016 to leave the EU. The UK government will have to formally notify the European Council its decision to withdraw from the EU (article 50 of the Lisbon Treaty). Treaties signed by a departing country will, still in application of article 50, cease to be applicable as from the date when an agreement between the EU and the departing country for determining the modalities of such withdrawal, becomes effective or at the latest (unless the Council unanimously decides to extend such delay, in agreement with the withdrawing country) two years after the notification of withdrawal by the departing country.
From a tax standpoint, some initial impressions are that the withdrawal of the UK from the EU means that (subject to terms of the agreement) the EU regulations and especially the EU Directives would no longer apply in the relations between the UK and the other EU Member States, presumably as from the date of signature of such agreement (or the end of the two-year period subject to its extension), and not as from the date at when the UK notifies its decision to leave the EU (this point is yet to be confirmed). Thus, it appears that the following would no longer apply in the relations between the UK and the other EU Member States:
For more information, contact a tax professional with Fidal* in France or with KPMG in the United States:
Patrick Seroin | + 1 (212) 954-2523 | firstname.lastname@example.org
Gilles Galinier-Warrain | +33 1 55 68 16 54 | email@example.com
Olivier Ferrari | +33 1 55 68 18 14 | firstname.lastname@example.org
* Fidal is a French law firm that is independent from KPMG and its member firms.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.