The When is it really illegal? To get to the bottom of it, the French banking federation (FBF) announced on Thursday that it had filed an appeal with the Council of State once morest the position of the tax authorities on CumCum. This scheme allows French banks to offer their foreign customers a technique to reduce the taxation of their dividends.
“We filed an appeal with the Council of State today,” a spokesperson for the FBF told AFP, confirming information from the financial agency Bloomberg. The aim is to have a “clear and coherent” legal framework on the subject, two days following raids in five major banks in France suspected of having participated in this tax scheme.
“Independent of ongoing proceedings”
Presented as “a subject of controversy between banking institutions and the tax authorities (…) 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 ParibasExane (fund manager, subsidiary of BNP), the Societe GeneraleNatixis and HSBC.
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 following 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.
Let the judge “say the law”
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).
“For lack of a response in line with the existing legislative framework, and following a detailed examination of the situation”, the FBF “opted for an appeal to the Board of stateso that the judge can say the law in the matter and thus an operating and legally certain device can be applied by all market players”, she explains.
