The French government is seeking to recover 2.5 billion euros in back taxes from several banks, including some of the country’s largest lenders, for a scheme they allegedly used to avoid taxes linked to dividend payments.
Gabriel Attal, the budget minister, gave the figure at a Senate public hearing earlier this month, but did not name the banks that had been issued with the requests.
It is the first time that the French government gives a figure on the potential losses for the public coffers deriving from the so-called cum-cum trades, i.e. operations aimed at seeking tax benefits associated with the payment of dividends.
Banks in other parts of Europe, including Germany, have been targeted by related investigations into so-called cum-ex transactions, in which governments refunded taxes on dividends that were never paid to begin with.
The disclosure of the French bill comes after the financial prosecution at the end of March sent 150 agents to raid the offices of several French banks, including BNP Paribas, Société Générale, HSBC, Natixis and the BNP-owned brokerage Exane.
France’s financial prosecutor’s office said at the time the raids were linked to five investigations launched in 2021 into alleged allegations of money laundering and tax fraud.
French banks allegedly helped foreign clients by temporarily taking shares they held in French companies around dividend days to avoid taxes being levied on them, prosecutors said.
French tax authorities sent a related tax invoice to several French banks for the period 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.
An Attal spokesman on Tuesday declined to say whether the banks in question have already repaid the 2.5 billion euros demanded by the tax authorities. Two people close to the discussions said the banks had opposed the requests and were contesting their terms and amounts. BNP, Natixis, HSBC and SocGen declined to comment on Tuesday.
France’s banking trade association, the Fédération Bancaire Française, has filed a lawsuit to force tax authorities to define which dividend arbitration strategies require the payment of taxes, the people added.
Work continues to determine the overall level of lost tax revenue, Attal said, and it could end up being higher once the investigation concludes.
“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, like 33 billion euros over two decades.”
Crédit Agricole, France’s second-largest bank by market, was not targeted by the raids in March after reaching its own settlement of 35 million euros in back taxes and fines, a person familiar with the matter said.
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