Article 182 B of the General Tax Code violates the freedom to provide services, provided that such a violation can be proven

A Luxembourg-based company had the right to use a berth at a marina in the south of France. Following a tax audit,administration determined that the fees collected for the temporary use of the company’s mooring rings by visiting yachts constituted fees received for the provision of services. This service therefore fell within the scope of the withholding tax under Article 182 B of the General Tax Code, and a tax assessment was issued to the company accordingly.

In its defense, the company argued, among other things, that being subject to this withholding tax violated European Union law.

In its ruling, the Administrative Court of Appeal first held that Article 182 B does indeed violate the freedom to provide services, as it results in a non-resident taxpayer being subject to withholding tax on a gross amount, whereas a resident taxpayer is taxed on a net amount—that is, after deductions.

The Court nevertheless finds that the foreign company has not provided sufficient evidence to justify the business expenses related to the activity that gave rise to the withholding tax.

Second, the Court finds that Article 182 B also violates European Union law because it results in foreign companies operating at a loss being subject to withholding tax, whereas French companies would not be subject to corporate income tax.

However, once again, the Court finds that the company has not provided evidence that it was operating at a loss in Luxembourg and that, consequently, it has not demonstrated an infringement of its freedom to provide services.

The tax assessment is thus upheld by the Court.

CAA Marseille, June 19, 2025, No. 24MA00363

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