P&O Ferrymasters Ltd – Fixed establishment

A French company was held to be the fixed establishment of a company established outside of France in respect of its international maritime transport activity carried out for French customers.

The Administrative Court of Appeal (ACA) considered that this activity was carried out in France, and that the attribution of this activity to the head office of the company in the UK would have led to an irrational outcome from a tax perspective.

Thus, the French company was considered as being a permanent structure able, in light of its personnel and its material and logistical resources, to perform the whole supply of services in an autonomous manner.

The ACA therefore held that the French tax authorities were right to have considered that, with respect to the principles governing the place of supply and the scope of VAT, the appellant company had a fixed establishment in France and that the supplies of services in question should be considered to have been made by it.

In this respect, the ACA pointed out that although the appellant company maintained that the assessments which it had received constituted double taxation incompatible with the principle of VAT neutrality, arguing that its French customers would already have self-accounted for VAT under the reverse charge, it had provided no evidence proving that the transactions concerned by the assessments had already been subject to VAT in this manner.

The question remains open as to the nature of the evidence which would have been admitted.

P&O Ferrymasters Ltd – ACA Douai, 15 March 2016, n°14A00505

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