VAT and stock leasing

A company that leased shares to its employees was subject to a tax audit, following whichadministration sent it a reassessment proposal that the leasing of these shares was subject to VAT.

In particular, the company argued that this lease could not constitute the provision of services because it amounted to nothing more than the management of its own assets.

The Administrative Court of Appeal, however, ruled that the leases were entered into as part of the company’s personnel policy and that they were intended“to align the interests of employees with those of shareholders.” It therefore concluded that these were indeed services subject to VAT.

The Court nevertheless finds that the leasing of shares should be considered a securities transaction within the meaning of Article 261 C(1)(e) of the General Tax Code and is therefore exempt from VAT.

It therefore overturns the company's tax assessment.

CAA Paris, May 7, 2025, No. 23PA03510: http://www.conseil-etat.fr/fr/arianeweb/CAA/decision/2025-05-07/23PA03510

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