CumCum Fraud: The Senate Wants to End Tax Arbitrage

This decision could mark a turning point in the fight against tax evasion in France. As part of its review of the 2025 budget bill, the Senate unanimously adopted an amendment aimed at eradicating fraudulent dividend arbitrage practices, known as “CumCum” schemes. 

These complex transactions allow foreign investors to avoid paying taxes on dividends from French companies, resulting in massive tax losses each year.
 

A tax scourge that has persisted for years
This vote comes after years of legislative battles on the issue. As early as 2018, the Senate had taken action in the wake of the revelations from the “CumEx Files,” an international scandal that exposed the inner workings of these sophisticated financial schemes. An initial attempt to regulate the practice, as part of the 2019 budget bill, resulted in a measure that was significantly watered down after back-and-forth deliberations in Parliament. As a result, six years later, “CumCum” schemes continue to thrive, depriving the government of several hundred million euros in tax revenue each year.
 

During the public hearing, Jean-François Husson, general rapporteur for the Finance Committee, expressed his exasperation at the ineffectiveness of existing measures: “The beneficiaries of these schemes enjoy a sense of impunity, believing themselves to be protected by the complexity and opacity of the arrangements they put in place. But complexity does not imply impunity.”
 

An amendment with a broader scope
The adopted amendment, introduced by the Finance Committee and supported by a broad coalition ranging from the Socialist groups to the centrists, aims to put an end to these practices by strengthening the legal framework. The key measure: withholding tax on dividends will now be applied to the actual recipient of the income, even in cases involving cascading intermediate structures used to conceal the true identity of the ultimate beneficiary.
 

In addition, the amendment expands its scope to include all complex derivatives that, until now, were not covered by the anti-abuse measures. This comprehensive approach is in line with the practices adopted by other European countries that have already strengthened their legislative arsenal against “CumCum” schemes.
 

The Senate Defies the Government
While the Senate delivered a major blow, it did not fail to reject a subamendment proposed by the government, which, according to Jean-François Husson, would have allowed tax loopholes to remain. “This subamendment would have allowed banks to continue their tax evasion practices. There is no way we will repeat the mistake of 2018,” he insisted during the session.
This firm stance was praised by many senators, who believe that the government can no longer afford to procrastinate in the face of practices that undermine tax justice and fuel inequality.
 

A Test in the Joint Committee
This bill, described as “decisive” by several senators, could finally put an end to the thorny issue of “CumCum” arrangements. However, it must still pass through the Joint Committee, where members of the National Assembly and senators will attempt to align their positions. In the event of a disagreement, the amendment could be modified or weakened—a scenario feared by its supporters.
 

For now, the amendment adopted by the Senate sends a clear message: the fight against tax evasion—whether perpetrated by foreign investors or complicit banking institutions—is a top priority. It remains to be seen whether this determination will be translated into definitive legislation in the coming months.