Tax Deductibility of Sponsorship Expenses: Sometimes Size Matters

A company had deducted sponsorship expenses paid to an association from its taxable income under a sponsorship agreement that provided for the company’s logo to appear on the vehicles and uniforms of the drivers receiving financial support.

Following a tax audit,administration the deductibility of 90% of these expenses.

The Administrative Court of Appeals, to which the case was referred, ruled that the publicity generated by the agreement was limited due to the small size of the stickers bearing the logos, as well as the association’s lack of visibility for this sponsorship.

It also believes that the publication of photos of the vehicles bearing the company’s logo on specialized websites provided only limited visibility relative to the amount of the sponsorship.

The Court also finds that the executive’s participation in car races was not covered by the sponsorship agreement. It further notes that "expenses incurred for the purpose of affixing advertising stickers on vehicles financed by an association in whose activities [the executive] participates in order to meet, in a recreational context, executives of other companies who may be potential business partners, do not present an interest to the [Company] that can be regarded as direct."

She therefore confirms the tax reassessment.

CAA Marseille, Dec. 18, 2025, No. 24MA01512

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