Tax Law

The Administrative Court of Versailles (France) ruled that hotels have no right to deduct VAT in relation to free hotel stays offered under a ‘hotel loyalty program’

CAA de VERSAILLES, 06.06.2017, 17VE00830, TVA, Programme de fidélité

In the present case, the Administrative Court of Appeal of Versailles (Cour administrative d’appel de Versailles) had to examine a loyalty rewards program in the light of the EU system of VAT.

(more…)

...

The French Council of State referred a request for a preliminary ruling to the CJEU regarding the rules on the Community framework for the taxation of energy products and electricity

Conseil d’État, 9ème – 10ème chambres réunies, 18/01/2017, 387833

The present case concerned the rules on the Community framework for the taxation of energy products and electricity.

The company Sucrerie de Toury operated a heat and electricity cogeneration for which it used natural gas as fuel. The gas that was delivered to it between 1 January 2006 and 25 December 2007 was submitted by its supplier to domestic tax on natural gas consumption under Article 266 quinquies of the French Customs Code.

(more…)

...

The French Council of State (Conseil d’Etat) ruled that promotional gifts are not subject to VAT

Conseil d’État, 10ème et 9ème chambres réunies, 08/06/2016, 380624, Inédit au recueil Lebon

In the present case, the Council of State (Conseil d’Etat) had to examine whether the delivery of promotional gifts could be subject to VAT.

X, a company specialized in the sale of textile goods, considered that items sent to clients as promotional gifts or ‘Refer-a-friend bonus’ should not be subject to VAT. The French fiscal administration refused to grant such tax deduction since Article 238 of Annex II of the General Tax Code previewed that items transferred with no financial counterpart or against a very low level of remuneration, such as commissions, salary, bonus, discounts and gifts, had to be included in the taxable amount for the VAT purposes.

Directive 77/388/CEE
Directive 2006/112/CE

(more…)

...

The French Council of State (Conseil d’Etat) clarified in which conditions French taxpayers may invoke judgments of the European Court of Justice in order to challenge national taxes

(Conseil d’État, 10ème chambre jugeant seule, 02/05/2016, 375579, Inédit au recueil Lebon)

 In the present case the Council of State (Conseil d’Etat) had to clarify the procedural rules governing tax recovery claims and to specify under which conditions a ruling of the European Court of Justice could serve as a legal basis for a tax recovery claim.

(more…)

...

The French Council of State obliged loss-making non-resident companies to pay their withholding tax on dividends

Conseil d’État, 8ème SSJS, 10/02/2016, 361179, Inédit au recueil Lebon

In the present case the Council of State (Conseil d’Etat) examined the French tax procedure rules governing the withholding tax on dividends.

X, a French company, distributed dividends to its parent company Y established in Belgium. The operation gave rise to the withholding tax in France. Y, which incurred losses, challenged the imposition and claimed that the French legislation was discriminatory as it entitled loss-making companies established in France to delay the tax payment until their balance returned to a surplus.

(more…)

...

Supplies of education and training that had been made by the BBC were found to be exempted from VAT

[2016] EWCA Civ 114 (02 March 2016)

This case arose out of a claim brought by the British Broadcasting Corporation (“the BBC”) for the repayment of VAT on supplies of services to the Open University (“the OU”) on the ground that the supplies were exempt under Article 13A(1)(i) of Directive 77/388/EEC (“the Sixth VAT Directive”) as supplies of education or training. The services consisted of the production and broadcasting of television and radio programmes relating to OU courses.

(more…)

...

The French Constitutional Council (Conseil constitutionnel) sanctioned the phenomenon of reverse discrimination

Conseil constitutionnel, 03/02/2016, décision 2015-520 QPC, Société Metro Holding France SA venant aux droits de la société CRFP Cash [Application du régime fiscal des sociétés mères aux produits de titres auxquels ne sont pas attachés des droits de vote] – Non conformité totale

In the present case the French Constitutional Council (Conseil constitutionnel) was requested to examine the constitutionality of Article 145-6-b ter of the French General Tax Code, which taxed the distribution of shares between parent and subsidiary companies.

(more…)

...

The French Supreme Court clarifies the conditions whether a brewery can benefit from the reduced rate of excise duty regarding alcohol and alcoholic beverages

Cour de cassation, civile, Chambre commerciale, 5 janvier 2016, 13-17063

In the present case rules on the harmonization of the structures of excise duties on alcohol and alcoholic beverages are discussed.

The company «Brasserie Bouquet» operated a restaurant in which it sold beer it produced itself. On 10 December 1998 the «Brasserie Bouquet» entered into an agreement entitled «contrat d’affiliation au Cercle des 3 brasseurs » (Affiliation agreement for the Circle of the Three Brewers) with the company ICO 3 B.

(more…)

...

The French Council of State posed limits on the tax consolidation of multinational companies

Conseil d’État, 9ème et 10ème sous-sections réunies, 15/04/2015, 368135, Inédit au recueil Lebon

The present case concerns taxation of multinational groups.

A French parent company had a subsidiary in Poland, which had a lower-tier subsidiary in Italy. These last companies made losses. Polish and Italian legislation did not allow them to impute their losses. As a consequence, the parent company, which was normally taxed in France, requested from French tax authorities to calculate its taxes by taking into account the losses made by the Polish and Italian subsidiaries. The French fiscal administration did not grant the request. The parent company’s request was also dismissed, in first instance, by the Administrative court of Montreil (Tribunal administratif de Montreil) and, in appeal, by the Administrative appeal court of Versailles (Cour administrative d’appel de Versailles).

(more…)

...