The French government is seeking to recover €2.5bn in back taxes from several banks, including some of the country’s largest lenders, over a scheme they are alleged to have used to avoid taxes linked to dividend payments.
Gabriel Attal, the minister for the budget, gave the figure in a public Senate hearing earlier this month, but did not name the banks that had been issued with the demands.
It is the first time that the French government has given a figure for the potential losses to public coffers from the so-called cum-cum trades, or transactions designed to seek tax advantages tied to the payment of dividends.
Banks elsewhere in Europe, including in Germany, have been targeted by related probes around so-called cum-ex trades, on which governments reimbursed taxes on dividends that were never paid to start with.
The disclosure of the French bill comes after financial prosecutors in late March sent 150 agents to raid the offices of several French banks, including BNP Paribas, Société Générale, HSBC, Natixis and BNP-owned brokerage Exane.
France’s financial prosecutor’s office said at the time that the raids were linked to five investigations launched in 2021 over alleged money laundering and fiscal fraud charges.
The French banks allegedly helped foreign clients by temporarily taking the shares they held in French companies around dividend days to avoid tax being levied on them, prosecutors said.
French tax authorities sent a related tax bill to several French banks regarding the period of 2017 to 2019, Le Monde reported on Monday.
The French newspaper was the first to report Attal’s comments, which were made on May 2.
A spokesperson for Attal declined to say on Tuesday whether the banks in question had already paid back the €2.5bn that the tax authorities had demanded. Two people close to the discussions said the banks had pushed back against the demands and were disputing its premise and the amounts. BNP, Natixis, HSBC and SocGen declined to comment on Tuesday.
The French banking trade association, the Fédération Bancaire Française, has filed a lawsuit to force the tax authorities to define what dividend arbitration strategies require tax payments, the people added.
Work is continuing to determine the overall level of lost tax revenue, Attal said, and it could end up being higher once investigations were concluded.
“There are several amounts that have been estimated,” Attal said. “We don’t have the information to confirm some of the very high estimates that are out there, such as €33bn over two decades.”
Crédit Agricole, France’s second-biggest bank by market value, was not targeted by the raids in March after reaching its own settlement of €35mn in back taxes and fines, a person familiar with the matter said.
