France Administrative Court of Appeal of Nantes Clarifies Payroll Tax Rules for Holding Companies

The French Administrative Court of Appeal of Nantes Dec. 9 issued Decision No. 25NT00704, clarifying the application of payroll tax to directors’ remuneration in holding companies. The taxpayer, a holding company engaged in managing investments and providing services to subsidiaries, sought relief from additional payroll tax contributions for 2018 to 2020, arguing that its CEO’s remuneration should be excluded. On appeal, the Administrative Court of Appeal of Nantes found that: 1) payroll tax applies if less than 90 percent of a company’s turnover is subject to VAT, including directors’ remuneration; 2) for multi-sector companies, payroll tax is calculated by sector, ...