An organization in Le Puy-en-Velay offered assisted lodging and meal options to people wishing to begin the Camino de Santiago in a building known as the “Grand Séminaire.”
Following a tax audit, the French Tax Authority (administration ) determined that the company’s business activities were subject to corporate income tax and issued a tax assessment to that effect.
The latter was challenged all the way to the Administrative Court of Appeals.
First, it will reiterate that, to be exempt from corporate income tax, an association must be managed on a nonprofit basis, and the activity it undertakes must not compete with commercial enterprises, particularly those located in the same geographic area. If this latter condition is met, the exemption still applies even if the activity is carried out under conditions that differ from those of commercial enterprises.
In this particular case, there was no debate regarding the selfless nature of the management.
Conversely, the association contested the geographic area selected by theadministration to determine whether the association was in competition with other businesses. The association believed that the area should be limited to the municipality of Le Puy-en-Velay, whereas theadministration had defined it as “the national level, or at the very least, the Le Puy route known as the Via Podiensis (GR 65), which connects Le Puy-en-Velay to Santiago de Compostela (Spain).”
The association argued, in particular, “that lodging in Le Puy-en-Velay allows pilgrims to set out on foot after the morning service at the city’s cathedral, and that a pilgrim can only cover a limited distance in a day, which means that they could only be accommodated by a facility located in that municipality.”
The court then noted that, for the years 2015 through 2021, fewer than 2% of pilgrims had set out from Le Puy-en-Velay and that 60% of them reported having undertaken the pilgrimage for non-spiritual reasons. It noted that the groups hosted by the association come from all over France or from a neighboring country.
She then points out that the Camino de Santiago is also a hiking trail that can be used by hikers, and that there are businesses within a 30-kilometer radius that offer the same services as the association.
She concludes that since participants can choose their route based on the available itineraries before arriving on site, the geographic area cannot be limited solely to the municipality of Le Puy-en-Velay and must, at a minimum, cover “all the municipalities surrounding the route starting from Le Puy-en-Velay.”
The court therefore ruled that the adjustment was justified, while also setting aside an advance ruling obtained by the association on the grounds that the profile of the people served had changed substantially since the ruling was issued.
CAA Lyon, Oct. 8, 2026, No. 25LY01459
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