Tax Treaty Case Law around the Globe 2015
1. Aufl. 2016
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I. S. 88Introduction
The case minister vs. Société Bayerische Hypo und Vereinsbank was rendered by the Conseil d’Etat on . It provides interesting details on the way the taxable profits of a permanent establishment located in France are determined when that permanent establishment is owned by a company whose head office is located in a foreign country with which France has concluded a tax treaty.
II. Facts
The Company Bayerische Hypo und Vereinsbank is a bank governed by German law. It created a French branch under the name HVB-AG Paris and contributed 10 million deutsche marks to this structure. The French branch also contracted loans with the headquarters of the company and third party companies, which is possible according to French banking law even if branches are deprived of any legal personality.
The French tax authorities considered that those loans showed a shortfall in the contribution made by the headquarters with regard to the cash which the branch would have had if it had had its own legal personality. In particular, they claimed that the amount of cash given to the French branch was insufficient in view of the prudential ratios required by French banking legislatio...