The situation
With no financial institution mandated to carry out the French reporting obligations, the client had to declare and pay the applicable levies himself, without waiting for his annual income tax return.
Our support
- 01
Declaring the dividends when they are received
From the bank statements and the distribution vouchers, we determined the gross amount of the dividends, checked any withholding tax levied abroad and prepared the no. 2778-DIV-SD return.
This return is used to pay the compulsory flat-rate withholding and the social levies due on dividends paid from abroad. It must, in principle, be filed, together with the corresponding payment, no later than the 15th of the month following receipt.
Simplified example: a foreign dividend received in May must, in principle, be declared and paid no later than 15 June. - 02
Ensuring consistency with the annual return
We then included the dividends in the client’s annual return, taking into account:
- the withholding already paid in France;
- any tax withheld abroad;
- the tax credit provided by the applicable tax treaty;
- the information shown on the foreign tax statements.
International compliance matters require, in practice, reconciling the documents provided by the foreign banks with the income reported on the French returns.
Point of attention. The 2778-DIV-SD return does not replace the annual return. The two must be coordinated to take account of the instalment paid in France and to avoid double taxation.
The result
The client was able to declare and pay the levies on time, then correctly report the dividends in his annual return, taking account of the tax already borne in France and abroad.
This case was handled by the firm, in light of the law and case law in force at the time of the engagement, and in the light of circumstances specific to it. It is presented for illustration purposes only: it does not constitute advice and does not predetermine the treatment that might be adopted in another matter.