Tax Treaty Case Law around the Globe 2020

S. 85Chapter 9 France: Permanent Establishment or Independent Establishment?

Marilyne Sadowsky

9.1. Introduction

Decision 405468 of the French Council of State (Conseil d’Etat) deals with the question of whether a UK company that organizes seminars and training courses for senior executives in a chalet in the French mountains, rented on an annual basis, has to pay corporate tax in France. Answering affirmatively, the Supreme Court (Conseil d’Etat) stated that a foreign company may be subject to corporate income tax in France on the basis of the treaty concept of “permanent establishment”, even if it is not an “independent establishment” in the sense of domestic law.

9.2. Facts of the case

Aravis Business Retreats Limited is a company incorporated under UK law. It organizes seminars and training courses for senior executives in a chalet that it rents in Saint-Jean-de-Sixt, located in the Aravis mountain range (Haute-Savoie), on the basis of a 9-year business lease. The company provides all of the seminars and training courses that it designs and markets to UK clients. The services offered in France include accommodation, meals, interventions with participants, relaxation services and the prov...