Press Release: 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.