Dividends paid to non-residents are generally subject to a withholding tax of 12.8% for natural persons or a withholding tax of 30% for companies. The Finance Law for 2018 provides that the withholding tax applicable to companies on dividends will be aligned with the French corporate tax rate from 1 January 2020 (see tax rate). With the exception of companies with a turnover of €250 million or more, the withholding tax rate on dividends paid from 1 January 2020 is 28%. There is no withholding tax on dividends, interest and royalties paid to resident and non-resident companies. Within the European Union, Member States have concluded a multilateral agreement on the exchange of information.  This means that they declare to each (their colleagues in the other jurisdiction) a list of persons who have applied for exemption from local taxation because they do not reside in the state where the income is received. From 2019, the requirements for the application of withholding tax exemptions and reduced withholding tax rates have been extended and formalised on the basis of existing EU legislation or double taxation conventions. In order to benefit from a reduced rate or a total exemption in accordance with the new rules, regardless of the value of the payments made, payers are required to do “due diligence”. Finland has a contractual network of more than 70 countries. Tax treaties generally reduce the legal rates in effect depending on the nature of the income. The withholding tax for foreign companies on Finnish dividends under the tax treaty in question is generally – but not always – 5 % if the beneficiary holds at least 25 % of the shares of the company to be paid. Dividends are subject to a withholding tax of 20%, while other withholding taxes are received at a rate of 15%. A withholding tax of 20% applies to the costs of intangible services paid to foreign beneficiaries, such as administrative or consulting costs, law, marketing, accounting, staff intermediation or guarantees, the tax may be reduced on the basis of the respective tax treaty.
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