Concept of “hidden activity”

A Spanish company which carried out an economic activity in France did not complete any administrative procedures (no declaration of the activity to the “centre of formalities” for businesses, or to the registry of the commercial court, and no tax return submitted within the relevant deadlines). The tax authorities issued assessments for corporation tax and VAT along with penalties for “hidden activity”.

The Conseil d’Etat considered that a “hidden activity” exists if a taxpayer has not submitted a tax return and has not made the activity known to a centre of formalities or to the registry of the commercial court. In such a case, the tax authorities are deemed to have established the presence of a hidden activity if the taxpayer is not able to show that it made an error justifying the fact that it did not comply with any of its obligations. In this respect, if the taxpayer can demonstrate that it complied with all of its tax obligations in another Member State, the justification of the error made must be analysed by taking into account the level of taxation in that other Member State and the arrangements for the exchange of information between the tax authorities of the two Member States.

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. He regularly assists his clients in the […]

William Stemmer

William Stemmer, Partner, has more than 20 years’ experience in Indirect Tax matters. William particularly specializes in the real estate sector. William carries out many training courses on VAT aspects […]

Nicolas Kazandjian

Barrister registered with the Hauts-de-Seine Bar, he started my career in the indirect tax service line of Deloitte Société d’Avocats in 1999. My current position is Director. My area of […]

Anne Gerometta

Anne Gerometta is Indirect Tax Partner of Deloitte Société d’Avocats. She advises international groups on their indirect tax issues. Anne notably assists operators from the Financial Sector – bank, insurance […]

Vanessa Irigoyen

With more than 16 years of experience, Vanessa has extensive expertise in the implementation of international efficiency business models for customs, export control and indirect tax purposes. Her functions notably […]

Delphine Nicault

Delphine Nicault is an Attorney-at-Law at the French Bar. She joined Deloitte in 2002 and assists her clients on day-to-day VAT issues. She developed an expertise in the VAT and […]