The French banking federation (FBF) announced on Thursday that it had filed an appeal with the Council of State against the position of the tax authorities on the taxation of dividends for foreign holders of shares in listed French companies, in the heart of the scheme called ‘CumCum'”. “We filed an appeal with the Council of State today,” a spokesperson for the FBF told AFP, confirming information from the financial agency Bloomberg.
Have a “clear and coherent” legal framework
The goal is to have a “clear and coherent” legal framework on the subject, two days after searches in five major banks in France suspected of having participated in this tax scheme. Presented as “a subject of controversy between banking establishments and the tax administration (…) for several years”, the role of intermediary of five banks in the taxation in France of dividends from shares of French companies makes the subject of several investigations opened in mid-December 2021 by the National Financial Prosecutor’s Office (PNF).
They led Tuesday morning to an operation of unprecedented scale, mobilizing 16 magistrates (out of 19 in post) from the PNF, 150 investigators (out of more than 250 in post) from the judicial finance investigation service (SEJF), as well as six German prosecutors from the Cologne public prosecutor’s office. Five financial institutions are targeted: BNP Paribas, Exane (fund manager, subsidiary of BNP), Société Générale, Natixis and HSBC.
Total tax adjustments exceed one billion euros
A source familiar with the matter told AFP on Tuesday that the total amount of tax adjustments for these five banks “only” exceeded one billion euros. If it happens two days after the searches, the filing of this appeal “for excess of power” is “completely independent of the legal proceedings in progress”, specifies the FBF, which does not comment further on this subject. The professional federation explains that it has been waiting for a long time for the position of the tax authorities on the subject, which resulted on February 15 in three publications in the BOFIP (Official Bulletin of Public Finances).
“Failing to have had a response in line with the existing legislative framework, and after detailed examination of the situation”, the FBF “opted for an appeal to the Council of State, so that the judge can ‘say the law’ in this area and so that an effective and legally certain system can be applied by all market players”, she explains.