Until recently, Article 244 bis B of the General Tax Code provided that when a non-resident transferred rights in a French company of which he held at least 25%, either alone or with his spouse, ascendants and descendants, at any time during the last five years, he had to pay a flat-rate levy of 12.8%.
Case law subsequently considered that this text was contrary to European Union law.
The 2025 finance law takes note of this case law.
The Council of State sanctions the absence of an option for the progressive scale of income tax and reductions for length of detention
By decision No. 489370 of May 31, 2024, the Council of State ruled that the provisions of Article 244 bis B of the CGI infringe the freedom of movement of capital in that they are likely to cause a natural person not residing in France to bear a higher tax rate than that to which a natural person domiciled there is subject, with only the latter being able to opt for taxation of capital gains on a progressive scale and benefit, where applicable, from proportional reductions for the length of ownership.
The 2025 Finance Act allows non-residents to file a tax claim
When selling company shares, a French tax resident must in principle pay a levy of 12.8% in income tax (+ 17.2% in social security contributions).
But it is sometimes in his interest to opt for the inclusion of this capital gain in the progressive scale of income tax, this option also allowing him to benefit from a reduction for the length of holding when the securities were acquired before January 1, 2018.
It was this difference in treatment that the Council of State had sanctioned.
The 2025 Finance Act takes note of this decision and now allows taxpayers to make a claim after the fact.
Years affected by a tax claim
If the 2025 Finance Act does not in itself allow for a refund to be obtained for years prior to 2024, the case law of the Council of State cited above should allow for a claim to be made for excess levies made in 2023 (until December 31, 2025).
The office of Me Nicolas Rozenbaum, tax lawyer in Paris, is at your disposal to make this type of claim.
For any consultation request, particularly remotely, you can contact Me Nicolas Rozenbaum directly by clicking here.
Please note that this information has been deliberately simplified and summarized for educational purposes and does not constitute legal advice.
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