In a decision published October 6th, 2017 (n° 2017-660 QPC Société de participations financière), the French Constitutional Court (“FCC”) has ruled that the first paragraph of article 235 ter ZCA of the French Tax Code, stating which entities are liable to the 3% tax on distributed income, was not compatible with French constitutional rules.This 3% tax, additional to corporate income tax, had been introduced into French law to apply to distributed and deemed-as-distributed income paid from August 17th, 2012. Distributions paid by companies belonging to a French tax consolidated group were exempt, as were distributions paid by collective investment vehicles (OPCVM) and small and medium-sized businesses within the meaning of EU law. As a consequence of the doubtful legality of this additional dividend tax, numerous refund claims have been filed, relying both on domestic and EU laws. The FCC has just ruled that this tax was not compliant with the French constitution, especially the principles of equality before the law and equality before public levies, due to the different treatment applied to parent companies distributing dividends paid by a subsidiary domiciled in an EU member State (not liable to the 3% tax as recently ruled by the French supreme administrative court – Conseil d’Etat) and those distributing dividends paid by a subsidiary domiciled in France or in a non-EU member State. This decision is applicable from its publication date to all cases not definitively settled at this date, therefore allowing companies which have been subject to the dividend tax in 2015, 2016 and 2017, to file refund claims until December 31st, 2017. RBB Business advisors’ team is available to assist you for preparing and assessing the refund claims.