(Article 30 of the 2016 Finance Act - censored by the French Constitutional Court)

Article 30 of the 2016 Finance Act intended to extend the scope of the financial transaction tax set forth in Article 235 ter ZD of the French Tax Code to intraday transactions, i.e., transactions that are settled in a single day.

The financial transaction tax applies to acquisitions of shares or deemed equivalent listed on a regulated market where such shares are issued by a French company which market capitalization exceeds one billion euros on December 1st of the year preceding the year of taxation. Currently, are only taxed the acquisitions resulting in a transfer of the shares' ownership within the meaning of Article L 211-17 of the French Monetary and Financial Code, i.e., the shares must be entered in the purchaser's accounts. Thus, shares acquisitions not evidenced by an entry in the accounts, provided that they are preceded or followed by sales of the same shares during a same single day, do not fall within the scope of the tax.

Article 30 intended to delete the requirement of transfer of ownership and thus to extend the tax to intraday operations. The measure was supposed to enter into force on December 31, 2016.

This article was subject to a claim before the French Constitutional Court for violation of the principle of accessibility and intelligibility of the law.

In a decision dated December 29, 2015 N° 2015-725 DC, the Constitutional Court ruled that Article 30 had been wrongly placed in the first part of the Finance Act and was therefore adopted under a procedure contrary to the Constitution. As a consequence, and without further review of the parliamentary grievances, Article 30 was declared unconstitutional.