French court rules taxes levied on capital gains on sale of French shares by non-EU companies is contrary to free movement of capital

Executive summary

On 20 October 2020, a French administrative court of appeals held that a legal entity resident in a non-European Union (EU) country is entitled to a refund of the tax paid on capital gains resulting from the sale of shares in a French company (Article 244 bis B of the French Tax Code (FTC)) on the ground that such tax is contrary to the free movement of capital since the grandfathering clause of Article 64 of the Treaty on the Functioning of the European Union (TFEU) i…