- The Conseil d’État ruled that profit shares received by a company from civil companies should be treated as financial products not subject to VAT.
- This decision challenges the exemption from payroll tax.
- Payroll tax is due by employers not subject to VAT or not subject to it on at least 90 percent of their revenue.
- A company involved in real estate promotion through civil construction-sale companies was audited for 2014 to 2016.
- The tax administration considered the company a mixed holding and subjected it to payroll tax.
- The company’s claim was rejected by the Paris administrative court in 2022.
- The Paris administrative court of appeal annulled this judgment in 2024, granting discharge of taxes and penalties.
- The Minister of Economy appealed to the Conseil d’État.
- The Conseil d’État stated that profit shares should be considered financial products not subject to VAT.
- The Paris administrative court of appeal made a legal error by treating these profit shares as real estate activity revenue subject to VAT.
- The Conseil d’État annulled the decision of the Paris administrative court of appeal.
Source: jdsupra.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
