The Franco-British Tax Treaty and Taxation of Business Owners
A taxpayer who served as the managing director of a French company had initially reported his income from that position on his tax return and paid the tax. He subsequently filed a tax appeal to claim the benefits of the tax treaty between France and the United Kingdom. The taxpayer, who believed he was performing his duties from London, argued that Article 15 of the treaty granted the United Kingdom the right to tax his remuneration and that he was therefore not required to pay tax on it.
The Court notes, however, that:
The company's de facto headquarters were in France, as were its employees.
The managing director had, as usual, been staying and carrying out his duties in Paris.
The corporate governance reports listed the company’s headquarters address as the CEO’s business address.
The pay stubs indicate employment in Paris.
While the CEO was staying in London, he was in daily contact with the teams at the company he managed remotely.
The Court further holds that, in this case, the following factors need not be taken into account in determining the place where the executive’s corporate office is exercised:
the fact that conducting business in London would have fostered“strategic thinking in a city conducive to the group’s international development.” The Court also notes that the executive had stated that he was moving to London for family reasons.
a total of 193 days in 2017 and 207 days in 2018 in London.
the provision of office space in London, as well as the appointment of a deputy managing director.
serving on the boards of fifteen other companies, including three in London.
The Court therefore dismisses the taxpayer's petition.