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Abstract
A tax credit (avoir fiscal), which is attached to certain distributions made by French companies that are subject to corporate taxes, may benefit shareholders of these companies. The tax credit was initially introduced to limit the impact of the double taxation which is applied at the level of the distributing company and again in the hands of the shareholders. Beginning with fiscal years as of January 1, 1993, the avoir fiscal is equal to corporate tax, the rate of which is 33.33%. Avoir fiscal are available for distributions which: 1. result from a valid decision taken during shareholders' meeting, and 2. benefit all shareholders in proportion to their rights. A person who is not a French resident does not benefit from the avoir fiscal unless a tax treaty specifically provides for it. French investment companies do not benefit from the avoir fiscal on their dividend distributions. Specific regulations do exist which limit the benefit of the avoir fiscal.