In a landmark decision, the French Constitutional Court ruled the French 3% tax that was introduced in 2012 on dividend distributions is unconstitutional in its entirety (October 6, 2017-660 QPC, SOPARFI). Arsene Taxand, Taxand France, expands on the ruling. 


In 2012, France introduced a 3% tax on distributions made by entities subject to French corporate income tax in France.


The European Commission opened a formal procedure against this tax in 2015.

In May 2017, the ECJ found that the 3% tax was incompatible with the EU Parent Subsidiary Directive, insofar as the tax is levied on redistributions of dividends received from EU subsidiaries eligible for the participation exemption regime of the Directive.


Following this ECJ decision, SOPARFI, a French distributing company, initiated a claim before the French Constitutional Court to obtain the repeal of the tax to any kind of distribution including, among others, those stemming from French or non-EU dividends.


Discover more: French Constitutional Court ruled that the 3% tax on dividends is unconstitutional

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Taxand's Take

It is estimated the refund cost could amount to circa 8 billion euros. In this context, French government is contemplating setting up agreements with claiming companies to spread out the refund on a 10 year period.

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Article tags

France | International Tax

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