France: Digital services tax referred to French Constitutional Court
This marks the first time the French DST has been submitted to constitutional review.
The French Conseil d’État on June 17, 2025, referred (decision no. 502728) a priority question of constitutionality (QPC) to the Conseil Constitutionnel (French Constitutional Court) regarding the French digital services tax (DST), enacted in 2019.
This marks the first time the French DST has been submitted to constitutional review.
Background
The QPC was raised by the taxpayer in the context of a claim for the refund of DST paid. The taxpayer argues that the DST provisions infringe upon rights guaranteed by Articles 6 and 13 of the Declaration of the Rights of Man and of the Citizen of 1789. The Conseil d’État found the arguments sufficiently serious and novel to warrant referral to the Constitutional Court.
Key constitutional concerns raised
The taxpayer challenges the DST on several grounds, including:
- Breach of equality between companies subject to French corporate income tax and those that are not
- Discriminatory exclusions that violate the principle of equality before tax law
- Unjustified differences in treatment between companies offering the same service depending on whether it is digital or not
- Group-based threshold rules that create unequal treatment and introduce an irrebuttable presumption of fraud
- Territoriality rules based on a “national presence coefficient” that are neither objective nor rational
- Inconsistent calculation methods for the national presence coefficient depending on whether services are operated by a single entity or multiple entities within a group
- The 2019 methodology for assessing the national presence coefficient does not reflect actual taxable capacity
- Excessive threshold effects that undermine equality in public burdens
- Enforcement disparities disadvantaging foreign operators due to administrative control limitations
Notably, the taxpayer did not raise any arguments based on potential conflicts with tax treaties.
Next steps
The Constitutional Court will now assess the constitutionality of the DST provisions in light of these claims. A decision is expected in the coming months.
This development could have significant implications for the future of the French DST and potentially for other unilateral digital tax measures in the EU.
For further information, contact a KPMG tax professional in France:
Laurence Mazevet | laurencemazevet@kpmgavocats.fr
Patrick Seroin-Joly | pseroinjoly@kpmgavocats.fr