L'assiette de la taxe sur les rachats-annulations de titres conforme à la Constitution
Background
The 2025 Finance Act introduced, for large companies, two taxes on capital reductions through the cancellation of shares resulting from companies buying back their own shares (FTC, Art. 235 ter XB, introduced by Article 95 of Law No. 2025-127 of 14 February 2025, the 2025 Finance Act).
One of the taxes is temporary, applying to capital reductions carried out between 1 March 2024 and 28 February 2025; the other is permanent, applying to transactions carried out from 1 March 2025.
Both taxes apply to companies with their registered office in France which, during the last financial year ended, generated revenue excluding tax of more than one billion euros.
The tax base is the amount of the capital reduction and a fraction of the sums which, for accounting purposes, qualify as share premiums (not the actual buyback price).
Decision No. 2026-1189 QPC of 27 March 2026 (Société Carrefour and others)
The Constitutional Council had been asked, by way of a priority question of constitutionality (QPC), to rule in particular on paragraph III of Article 235 ter XB of the FTC.
These provisions were criticised for leading, depending on the amount of those premiums, to very different levels of taxation between the companies subject to the tax. It was also argued that this tax base, not being linked to the sums paid out to buy back the shares, was too disconnected from the ability to pay of the companies liable. In other words, Carrefour, Teleperformance and Spie Batignolles argued that the tax base, being disconnected from the sums paid for the buyback of the shares, infringed equality before public burdens (1789 Declaration, Art. 13) and equality before the law (1789 Declaration, Art. 6).
The Constitutional Council noted that the legislature had intended to pursue an objective of budgetary yield by taxing capital reductions that large companies carry out by drawing on their surplus cash. It also pointed out that it does not have a general power of assessment and decision of the same nature as that of Parliament.
The Constitutional Council held that the legislature could define the tax base by reference to the amount of the capital reduction and, in the same proportion as that reduction, to the amount of the share premiums, since these elements reflect the nature and scale of these transactions and the management choices of the companies that carry them out. It thus considered that the legislature was not required to define the tax base by reference to the sums actually paid out to buy back the shares. It concluded that the law was based on objective and rational criteria related to the objective of budgetary yield pursued.
Furthermore, after recalling that the principle of equality before the law does not require the legislature to treat differently persons who are in different situations, the Constitutional Council held that the legislature was entitled to define identical tax base rules for all the companies liable, without distinguishing according to the amount of share premiums recorded in their accounts.
The Constitutional Council concluded that the contested provisions infringed neither the principle of equality before public burdens nor that of equality before the law. It therefore declared the contested provisions consistent with the Constitution.