Receipt of dividends by a holding company

The company Ginger held shares in its subsidiaries. The company took a management role with respect of all of its subsidiaries, providing them, to this effect, with services subject to VAT. Ginger also received dividends. The right to deduct VAT on costs incurred by the company had been, in part, challenged by the French tax authorities.

With the case before them for a second time in the course of the litigation, the Conseil d’Etat held that the Administrative Court of Appeal had made an error of law in holding that Ginger could not deduct the full amount of input VAT incurred solely on the basis that it received from its subsidiaries dividends which were outside the scope of VAT.

The Conseil d’Etat is adopting the position set out by the CJEU (Larentia + Minerva, Marenave Schiffahrts, joined cases C-108/14, C-109/14), thus completely overturning its previous case law. Thus, the receipt of dividends by a holding company which takes a management role in all of its subsidiaries is not liable to suffer a reduction of its right to VAT deduction.

Michel Guichard

Michel Guichard, Partner, leads the Indirect Tax activity. With more than 30 years’ experience in International and French Tax law, he advises his clients on indirect tax matters. Michel is […]

Odile Courjon

Odile Courjon, Partner, has developed a strong expertise in indirect tax issues (VAT, wage taxes, excise taxes, export control and customs) in France and overseas. She advises her clients in […]

Bertrand Jeannin

Bertrand Jeannin, Partner, supplies strategic and technical advice to French and foreign multinational groups in all aspects of their VAT and customs policies. Major focuses of Bertrand’s input involve the […]

William Stemmer

William Stemmer, Partner, has more than 15 years’ experience in Indirect Tax matters. William particularly specializes in the real estate and financial sectors. William is a lecturer at the University […]

Anne Gerometta

Anne, Director, has been advising companies on indirect tax issues for more than 15 years. Anne has developed a specific expertise on the manufacturing sector (VAT, customs and Export Control) […]