France Upholds Digital Services Tax in Landmark Ruling

On September 12, 2025, the French Constitutional Court issued a decision in one of the most significant cases concerning the imposition and application of the Digital Services Tax (DST) on domestic and international digital companies. Considering the potential broader impact of this case on the implementation of the DST in other EU countries, the Constitutional Court's decision has much greater importance than the mere application of the rules within France.

The Impact of the Constitutional Court Decision 

The French Constitutional Court upheld the application of the DST and rejected the challenge brought by Digital Classifieds France. More precisely, the Court confirmed that the DST does not violate the constitutional principles of equality before the law or equality in public burdens. 

The Court upheld the validity of the relevant Articles of the French Tax Code, concluding that the tax’s design, including its group-level thresholds, the territoriality rules based on the national presence coefficient, and the exclusion of certain services from the scope of the tax, was sufficiently justified and proportionate.

As a direct consequence of this ruling, the DST remains enforceable, and in-scope taxable persons must continue to comply with its requirements. Additionally, companies that have already paid the DST can no longer seek refunds on constitutional grounds, and the decision provides a more substantial degree of legal certainty around the French DST regime. Furthermore, the decision reduces the likelihood of further constitutional challenges and may enhance the legitimacy of similar unilateral digital taxes introduced by other EU countries. 

Conclusion

The decision marks a significant victory for France and the lawmakers, ensuring that this highly controversial tax, at least from the perspective of the digital companies, primarily American tech giants such as Google, Apple, Facebook, and Amazon, remains in effect. Moreover, the outcome of the case is expected to provide significant budgetary relief, as it is anticipated that France will generate approximately EUR 775 million in revenue in 2025 from DST.

Source: Constitutional Court - Decision No. 2025-1157, VATabout