Section 155A of the General Tax Code and Tax Residency

A married couple moved to Spain in the summer of 2014, where they have been living ever since. The husband, however, has remained an employee and shareholder of a French company.

The company was subject to a tax audit during whichadministration that the IT services provided by the man were paid for through a British company acting as an intermediary.

It then reassessed the couple's tax liability, determining that these benefits were taxable under Article 155 A of the General Tax Code.

In particular,administration that the couple should be regarded as French tax residents for the years 2014 and 2015. They did not dispute their tax residency in Spain for the year 2016.

As required by case law, the Administrative Court of Appeal will first determine whether the taxpayers are tax residents of France under domestic law. It will then determine whether, under the tax treaty, another country of tax residence should be designated. Finally, it will determine whether Article 155 A is indeed applicable for the direct taxation of the taxpayers on the IT services provided by the individual.

Regarding the year 2016

The Administrative Court of Appeal will then rule, with respect to 2016—a year for which there was no dispute regarding tax residency—that the application of Article 155 A to a non-resident requires proof that the services were performed in France.

It finds thatadministration such proof; therefore, Section 155A was not applicable.

Regarding the year 2015

With regard to the year 2015, the Court finds that, under domestic law, the taxpayers should be considered to have their residence in France. For the purposes of applying the tax treaty, however, it finds that the 183-day presence requirement in France is not met and that they should be considered to have their tax residence in Spain.

The Court therefore ruled that Article 155A was not applicable.

Regarding the year 2014

Finally, with regard to the year 2014, the Court also ruled that, under domestic law, the taxpayers are tax residents of France. For the purposes of applying the tax treaty, it ruled that they have their place of residence in both countries.

Provided that the taxpayers hold French nationality, the Court holds that their tax residence is in France under the treaty.

It further holds that the convention precludes the application of Article 155A only if the taxpayer has a fixed base in Spain. Since no evidence of such a fixed base has been provided, the assessment is upheld.

CAA Paris, Oct. 20, 2025, No. 24PA00075

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