Régime mère-fille (parent-subsidiary regime)
A French tax exemption allowing a parent company to receive dividends from its subsidiaries at near-zero effective tax — only a 5% notional expense add-back is subject to corporate tax. The parent must hold at least 5% of the subsidiary for more than two years.
In practice
On 1 million euros of dividends distributed by a profitable subsidiary, the parent reinstates 50,000 euros (5%) into its taxable income, generating roughly 12,500 euros of corporate tax — an effective rate of 1.25%. Without this regime, dividends would be taxed twice: once in the subsidiary and again in the parent. The 5% ownership threshold is comfortably met in almost every holding structure.