France’s Digital Services Tax Ruling Expected September 2025

August 15, 2025

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On June 17, 2025, the French Administrative Supreme Court referred a preliminary question to the Constitutional Court regarding the constitutionality of the Digital Services Tax (DST), specifically concerning equality before the law, discriminatory treatment, and questionable territoriality rules. As a key legal challenge unfolds, culminating in a decisive ruling expected in September, the case tests the delicate balance between innovation-driven taxation and fundamental constitutional principles such as equality and fairness.

Key Developments of the Case

As previously explained, the Administrative Supreme Court referred a preliminary question to the Constitutional Court as a result of a DST refund claim from a Digital Classifieds France company, which argued that the 3% DST provisions violate constitutionally guaranteed rights.

To remind, the 3% DST applies to revenues generated in France from specific digital activities, such as targeted advertising, the sale of user data, and intermediary services between users. However, not all companies are subject to DST. For DST to apply, companies must have global revenues of at least EUR 750 million and French revenues of EUR 25 million or more.

Previously, the US administration criticized the implementation of the DST as discriminatory toward US tech giants. However, in the present case, it is clear that French tech companies also find this tax burdensome and, in this instance, unconstitutional. After hearing arguments and claims from all interested parties, including representatives of Airbnb, and examining all the merits of the request, the Constitutional Court announced that it will decide on the raised questions and issues on September 12, 2025.

Conclusion

While the primary goal of implementing DST was to ensure that major digital companies contribute fairly to public finances, the current battle raises the questions of equality, discrimination, and territorial scope that extend beyond foreign tech giants to domestic players as well. With the decision date approaching, all stakeholders will be closely watching, aware that the outcome may reshape the future of digital taxation in France and influence ongoing international efforts to regulate the digital economy.

Source: VATabout, Constitutional Court, Bloomberg

What is the Digital Services Tax in France?

The Digital Services Tax is a 3% levy on revenues from certain digital activities in France, applying to companies with global revenues of at least EUR 750 million and French revenues of EUR 25 million or more.

Why is the French Digital Services Tax under constitutional review?

The tax is under review because a French company claimed it violates equality before the law, involves discriminatory treatment, and has questionable territoriality rules.

When will the French Constitutional Court decide on the DST case?

The Constitutional Court is expected to announce its decision on September 12, 2025, after considering all arguments from involved parties.

Which companies are challenging the French DST?

n this case, a Digital Classifieds France company initiated the challenge, with other stakeholders like Airbnb also participating in the legal debate.

How has the United States reacted to France’s DST?

The US administration has criticized France’s DST in the past, calling it discriminatory toward US tech giants, though French companies are also challenging it.

What could be the impact of the Constitutional Court’s decision on DST?

The decision could reshape digital taxation in France and influence global efforts to regulate the digital economy, affecting both foreign and domestic tech firms.

Digital Services Tax (DST)

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