The French Tax Authority issued guidance on the declaration and payment procedures for the new tax on capital reductions involving share buybacks by certain companies on 11 April 2025.
The tax must be reported and paid alongside the taxpayer’s VAT return. For capital reductions conducted between 1 March 2024 and 28 February 2025, the tax is generally due with the March 2025 or first quarter 2025 VAT return, depending on the VAT reporting frequency.
Article 95 of the Finance Act for 2025 introduces a tax on capital reductions through the cancellation of shares resulting from companies repurchasing their own shares.
Regarding timing, the tax is divided into:
- A temporary tax, applicable to all capital reduction operations carried out between 1 March 2024, and 28 February 2025.
- A permanent tax, codified in Article 235 ter XB of the General Tax Code (CGI), applicable to all capital reduction operations from 1 March 2025, onwards.
These taxes apply to companies headquartered in France that recorded a turnover (excluding taxes) exceeding 1 billion euros in their last closed financial year, based on consolidated or combined financial statements if applicable.
Unlike the temporary measure, the permanent tax applies to each successive operation.
Declaration and Payment Procedures
Here is an overview of how companies should declare and pay the tax:
| VAT Regime | Declaration & Payment Procedures | |
| Capital reductions from March 1, 2024 – February 28, 2025 | Capital reductions from March 1, 2025, onwards | |
| Monthly VAT | Annex 3310A-SD with the VAT return for March 2025 | Annex 3310A-SD with the VAT return for the month in which the reduction occurs |
| Quarterly VAT | Annex 3310A-SD with the VAT return for the first quarter of 2025 | Annex 3310A-SD with the VAT return for the civil quarter in which the reduction occurs |
| Simplified VAT | First declaration 3517-S-SD (CA12) due on or after 1 April 2025 | Declaration 3517-S-SD (CA12) for the period in which the capital reduction occurs |
| Non-taxable | Annex 3310A-SD by 25 April 2025 | Annex 3310A-SD by the 25th of the month following the capital reduction |
Forms 3310A-SD, 3310-CA3G-SD, and 3517-S-SD (CA12) will be available online from 1 July 2025 for electronic filing.
As a result, taxpayers required to declare and pay the tax before 30 June 2025, must submit Form 3310A-SD or 3517-S-SD, downloadable from impots.gouv.fr, along with the corresponding payment. They must enter line 51 (for 3310A-SD) or 4N (for 3517-S-SD).
Online forms will be available from 1 July 2025. Until then, taxpayers with obligations before 30 June 2025 must submit the appropriate form—3310A-SD or 3517-S-SD—along with payment, to their business tax office. The tax should be reported on line 51 (form 3310A-SD) or line 4N (form 3517-S-SD).
Earlier, France’s Finance Law 2025 was published in the Official Gazette on 14 February 2025.
A new 8% tax on share buybacks applies from 1 March 2024 for large companies with an annual turnover of at least EUR 1 billion. A temporary restriction on loss carryforwards applies to companies with deficits exceeding EUR 2.5 billion over three consecutive years.
