On the 9th of October 2026, the French Council of State dismissed Sherpa’s appeal challenging the practice of tax settlements, also known as “règlements d’ensemble”. In justifying this dismissal, the high court held, on the one hand, that Sherpa did not have sufficient standing to bring the action and, on the other hand, that the administrative note of June 2004 – which was the subject of the appeal and identified, in particular, by the Court of Auditors and several parliamentary reports as the basis for this practice – had “neither the purpose nor the effect” of establishing or regulating it.
Opaque agreements that benefit the wealthiest
These settlements enable the administration to negotiate, with the utmost discretion, reductions in tax assessments with certain taxpayers, including reductions in the amounts due. Lacking any specific legislative framework, this practice represents a considerable potential shortfall in public finances: an average of €1.26 billion (1) in tax assessments waived each year between 2019 and 2024, according to a parliamentary report.
Tax agreements such as « règlements d’ensemble » primarily benefit the wealthiest taxpayers and large companies. In 2024, more than 70% were concluded with corporate entities, which accounted for more than 96% of the tax reductions granted. This concentration of benefits in favour of the most powerful economic actors raises serious questions regarding respect for equality before the tax system, one of the founding principles of the French republican pact.
This situation is all the more worrying given the current budgetary context. Whilst budget debates are taking place in the National Assembly, the government is repeatedly emphasising the need to cut spending, public services are severely under-resourced, and the State continues to forgo substantial tax revenue for the benefit of large companies.
A non-decision that sidelines civil society
Faced with these issues, the Council of State has sidestepped the matter. By dismissing Sherpa’s appeal on grounds of admissibility, it has avoided ruling on the legality of this practice. Furthermore, by stating that the 2004 administrative note is now obsolete, it leaves the question of its legal basis entirely unresolved. A practice with major implications for public finances thus continues to flourish without any real legislative framework nor scrutiny over its legality.
This decision also raises a fundamental democratic question: whether NGO’s are able to fulfil their role as a counterbalance to power. By ruling that Sherpa has no legal standing to bring proceedings and that the organisation is therefore not entitled to challenge this practice, the Council of State is restricting civil society’s scope for action. Yet combating economic crime, scrutinising the state’s tax practices and defending citizens’ interests lie at the very heart of Sherpa’s mission.
Sherpa reaffirms its commitment to upholding fair and transparent taxation, as well as the right of civil society organisations to challenge government practices that undermine the public interest.
Press Release from :
Sherpa.
For more information : presse@asso-sherpa.org.
