France's Constitutional Council issued Decision No. 2025-1157 QPC on 12 September 2025, rejecting a constitutional challenge to the country's digital services tax (DST) and confirming the validity of key provisions governing the 3% levy on large digital platforms.
Challenge and Ruling
Digital Classifieds France challenged the DST framework, arguing that the tax violated constitutional principles of equality before the law and public charges. The company contended that the dual revenue thresholds—€750 million globally and €25 million in France—created disproportionate burdens and discriminated based on company residence.
The Constitutional Council rejected these arguments, finding that the DST applies uniformly to all entities meeting the liability thresholds regardless of their place of establishment. The Court determined that the revenue-based calculation method does not impose disproportionate tax burdens since the tax targets actual French digital turnover rather than global operations.
Technical Framework Upheld
The Council validated the DST's territorial nexus rules, which determine French taxable revenue through user location data and account registration criteria. For intermediation platforms not facilitating transactions, services are deemed provided in France when users maintain accounts opened from French territory during the tax year.
The decision also upheld the methodology for calculating the "national presence coefficient" based on the proportion of French users relative to total platform users. The Council found this approach objectively reflects the value creation attributable to French digital activity.
Context
The ruling strengthens France's position in international digital taxation debates and provides legal certainty for the DST framework introduced in 2019. The decision comes as OECD Pillar One negotiations continue on global digital tax coordination, with France's unilateral measure serving as a model for similar taxes implemented across multiple jurisdictions.
