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France: New tax on capital reductions from cancellation of shares upheld (Constitutional Council decision)

Decision No. 2026 1189 QPC

april 30, 2026

The French Constitutional Council on March 27, 2026, issued Decision No. 2026‑1189 QPC, validating the tax introduced by the Finance Act for 2025 on capital reductions resulting from the cancellation of shares following a company’s repurchase of its own shares.

The court held that the legislature could lawfully define the tax base by reference to the amount of the capital reduction and a proportionate share of capital‑related premiums, without linking it to the price paid for the shares.

The court concluded that this method does not breach the principles of equality before the law or equality before public charges and reflects the nature and scale of the transactions carried out by large enterprises.


For further information, please contact a KPMG tax professional in France:

Marie-Pierre Hôo | mhoo@kpmgavocats.fr

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