Referral of a QPC regarding the tax on share buybacks

The Conseil d'Etat a preliminary ruling on constitutionality (QPC) regarding the tax on share buybacks to the Constitutional Council today.

In its decision, the Conseil d'Etat that:

• The tax on the cancellation of securities occurring between March 1, 2024, and February 1, 2025, is not retroactive.

• A tax on share buybacks would not be contrary to the Parent-Subsidiary Directive.

The Council nevertheless considers that there is a serious risk of unconstitutionality insofar as the criteria defining the tax base for share buybacks:

• "would not be objective and rational in light of the objectives set by the legislature."

• "are likely to result in the taxpayers concerned being subject to a significantly different tax burden for share buybacks followed by cancellation, conducted under identical financial terms, depending on the existence and amount of capital premiums recorded on the balance sheet of the liable company."

The Conseil d'Etat thus Conseil d'Etat the QPC to the Constitutional Council, which has three months to issue its ruling.

It is therefore advisable to file claims in this regard. Since we have already filed claims on behalf of clients in this matter, we are available to discuss this with you if needed: please contact us.

EC, 8th and 3rd Sub-Sections, Jan. 12, 2026, No. 508944 et seq.