International taxation sometimes holds unpleasant surprises for entrepreneurs structuring their investments abroad. The ruling by the Paris Administrative Court of Appeal (CAA) on April 30, 2026 (n° 24PA04972, SARL Sauret Consultants Holding Offshore) is a particularly instructive illustration.

It concerns the withholding tax applicable to dividends from French companies paid to a Moroccan holding benefiting from the offshore financial center regime, raising essential questions for international companies and holdings: when is an exemption provided by a tax treaty actually applicable?

In this article, PRAX Avocats deciphers the lessons from this decision and presents precautions to take to secure the taxation of your international flows.

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1. A seemingly favorable context: the Franco-Moroccan tax treaty

France and Morocco are linked by a tax treaty signed in 1970, aimed at avoiding double taxation and preventing tax evasion.

Its Article 13 provides for the exemption from withholding tax on dividends paid to a company resident in the other State, under certain conditions.

In theory, when a Moroccan company holds shares in a French company, the dividends it receives can be exempt from French withholding tax, provided, of course, that it is indeed taxable in Morocco on these revenues.

It is precisely this requirement — “effective taxation” — that was at the heart of the dispute examined by the CAA of Paris.

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2. The dispute: a flat tax insufficient to justify an exemption

The Moroccan company in question was subject to a specific tax regime applicable to companies established in Moroccan offshore financial centers.

This regime provided for a flat tax of 5,000 US dollars per year, regardless of the amount of profits made.

On this basis, the holding claimed the benefit of the exemption provided by Article 13 of the Franco-Moroccan treaty, arguing that this annual contribution constituted a tax within the meaning of the treaty.

The CAA rejected this argument: it ruled that this flat amount could not be equated to a corporate tax or a similar tax, as it did not depend on the profits made and was not mentioned among the taxes covered by Article 8 of the treaty.

In other words, even if the holding had a tax residence certificate (form 5000-FR), this was not sufficient to demonstrate effective taxation of the dividends in Morocco.

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3. The CAA's reasoning: the notion of effective taxation at the heart of the system

The decision of April 30, 2026, recalls a fundamental rule of international tax law: the exemption from withholding tax is not automatic; it requires effective taxation in the residence State of the beneficiary.

Thus, three criteria must be met to benefit from the exemption:

1. A real tax residence in the partner State of the treaty (here, Morocco).

→ A mere registration or domiciliation is not enough; it must be demonstrated that there is real activity and economic substance.

2. A taxation equivalent to corporate tax in the residence State.

→ The tax regime must be based on actual profits and not be symbolically flat.

3. A double administrative verification:

→ The tax residence certificate (form 5000-FR) attests to residence but does not prove effective taxation. The French administration can therefore refuse the exemption in the absence of proof of taxation on distributed profits.

The CAA also considered that invoking the French administrative doctrine (BOI-INT-CVB-MAR n° 130) was ineffective, as this doctrine did not concern the situation of a flat tax but rather tax adjustments.

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4. What are the consequences for French companies and holdings?

This decision has concrete implications for companies with international holding structures, particularly in jurisdictions with favorable tax regimes.

a. For distributing French companies

When they pay dividends to a foreign company, they must check whether the French withholding tax (generally 25%) is indeed eliminated by the applicable treaty.

It is no longer sufficient to present a residence certificate:

→ it must be ensured that the beneficiary is effectively subject to tax in its State, in a manner comparable to taxation on profits.

b. For foreign holdings

Companies located in areas benefiting from a flat or symbolic tax regime (such as certain free zones or offshore financial centers) face an increased risk of having the exemption denied.

To maintain legal security, they must demonstrate real economic substance (premises, personnel, effective management) and provide proof of taxation.

c. For international groups

This case law invites a review of participation holding chains: “mailbox” structures or those with low tax substance expose the group to unanticipated withholding taxes and potentially costly disputes.

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5. Best practices to secure your international flows

Investors and executives must conduct a thorough legal and tax diagnosis before any cross-border payment. PRAX Avocats particularly recommends:

Checking the treaty coverage between France and the State of the beneficiary company;

Analyzing the local tax regime to ensure it allows for effective taxation of French-source income;

Documenting the real economic substance of the foreign company (premises, activity, management, certified accounts);

Keeping all supporting documents to demonstrate the reality of taxation in case of a tax audit;

Planning, from the design of the group, structures adapted to international taxation, avoiding double taxation while remaining compliant with anti-abuse principles.

For startups and growing companies, these steps not only reduce tax risk but also enhance the financial credibility of the group in the eyes of investors.

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6. A strategic issue for startups and investors

In an economic context where the mobility of capital and international projects is increasing, the taxation of dividends and intergroup flows becomes a strategic factor.

French startups and scale-ups, often tempted by foreign holding structures, must be particularly vigilant.

The decision of April 30, 2026, confirms a fundamental trend: tax jurisdictions now require substance and transparency, not only from large multinationals but also from young international companies.

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In conclusion

This decision by the CAA of Paris illustrates the increasing rigor of tax authorities regarding effective taxation.

It reminds us that an exemption provided by treaty only applies if the taxation is real — and not merely deducted from a light or flat tax regime.

Executives have every interest in anticipating these issues when structuring their groups, especially when resorting to foreign holdings.

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Contact PRAX Avocats, a law firm specializing in French and international taxation as well as business law.

Our lawyers assist companies and startups in the legal and tax structuring of their projects, in collaboration with recognized “Best Friends” firms for their sector expertise.

Withholding tax on dividends paid to a Moroccan offshore holding: practical lessons for French companies