Letterbox Companies Beware: France Wins Tax Residency Battle and Rule Against “Shell” Company

Key message

• France is cracking down on “letterbox companies”—businesses registered abroad but run from France.
• If you manage a foreign company from French soil, you could face tax bills and severe penalties.

A French appeals court has ruled that a Luxembourg holding company, Arman Innovations SA, must pay:-

• French corporate tax,
• VAT, and
• A huge penalty for failing to declare its activity.

What happened?

• The company avoided French taxes by invoicing royalties from Luxembourg, but the court saw this as an artificial setup.
• The company claimed to be based in Luxembourg but had no real office or staff there—only a mailing address.
• French tax investigators found that all key decisions were made in France, from the home of a director near Paris.
• Under the France–Luxembourg tax treaty, the “place of effective management” decides tax residency.
• The court said that place was France, not Luxembourg.

Takeaway:

1. Simply having a foreign address is not enough. Real substance, local offices, staff, and decision-making is essential to avoid being taxed in France.
2. “Letterbox” risk: Domiciliation + outsourced admin without autonomy is a red flag; emails, signatures, payment approvals, and where directions are issued carry decisive evidential weight. [legifrance.gouv.fr]
3. Treaty “POEM” still decisive: The place of effective management test will override formalities if strategic decisions emanate from France. [legifrance.gouv.fr]
4. VAT alignment: If customers are in France and HQ of economic activity is in France, local VAT applies; relying on reverse charge or doctrine without L.80 A grounding will fail. [legifrance.gouv.fr]
5. Penalties: The 80% occult‑activity surcharge can stick even when the company files abroad, if the Court finds deliberate artificiality and French non‑compliance. [legifrance.gouv.fr], [blog.bornh…avocats.fr]

What happened?

• The Court rejected Arman Innovations’ appeal and confirmed
• French corporate income tax (IS) assessments for FY 2012–2017,
• VAT reminders for 2014–2017, and
• The 80% surcharge for “activité occulte”. [legifrance.gouv.fr]

Why?

• Despite a Luxembourg registered office and use of domiciliation/accounting providers, the Court found the place of effective management (siège de direction effective) to be in France (Paris region home of a director), relying on documentary evidence from L.16 B LPF search-and-seizure operations and follow-on audit. [legifrance.gouv.fr]
• Under CGI art. 209 and the France–Luxembourg 1958 Treaty (art. 2(3) “établissement stable” incl. siège de direction; art. 4(1)), profits were taxable in France; the home in France was treated as the PE / place of management. [legifrance.gouv.fr]
• For VAT, with French B2B customers and the company’s headquarters of economic activity in France, the place of supply was in France (CGI arts. 256, 256 A, 259), making Arman Innovations liable to French VAT (not its customers under reverse charge), also defeating reliance on administrative doctrine. [legifrance.gouv.fr]
• On penalties, the Court upheld the 80% “occult activity” increase (CGI art. 1728, 1-c), rejecting the “good faith error” line—particularly given tax advantages sought in Luxembourg and the absence of French filings, and noting the reverse charge neutrality effect when royalties are artificially invoiced from Luxembourg to a French group company. [legifrance.gouv.fr]

Case Law Update: Luxembourg Company Deemed French Tax Resident

• Date: 8 January 2026
• Court: Versailles Administrative Court of Appeal

• Case: Arman Innovations SA (Luxembourg)
• Decision: CAA de Versailles, 3rd Chamber, 8 Jan 2026, n° 23VE00165 (Unpublished in Lebon).Parties: SA Arman Innovations (Luxembourg) v. Minister for the Economy, Finance and Industrial, Energy and Digital Sovereignty.
  Source: Full decision on Légifrance; mirrored on Juricaf; early commentary on Bornhauser Avocats’ blog. [legifrance.gouv.fr], [juricaf.org], [blog.bornh…avocats.fr]

Case Brief (with all the points you asked to be accounted for)

1) Procedural posture & parties

• Prior instance: TA Versailles, judgment n° 2102190 (29 Nov 2022) rejected the taxpayer’s claims. Appeal lodged 25 Jan 2023 by SA Arman Innovations (Me Bourdeau).
• Hearing 16 Dec 2025; public decision 8 Jan 2026. Bench: Besson-Ledey (Pdt), Marc (Pdt-Ass.), Hameau (1er cons.); conclusions by Rapporteur public Illouz. [legifrance.gouv.fr]

2) Taxpayer’s claims (IS + VAT)

• IS: Profits wrongly taxed in France since effective management was in Luxembourg.
• VAT: Not liable in France per CGI 283-0 / 283-1 and doctrine BOI-TVA-DECLA-10-10-20 n°40, arguing no French PE under CJEU C‑260/95 (20 Feb 1997) and BOI-TVA-CHAMP-20-50-10. [legifrance.gouv.fr]

3) Procedure irregularity pleas (notification)

• Alleged invalid notice of collection and rejection of prior claim notifications (sent to the director’s French address rather than the Paris-registered office post‑transfer), citing LPF R.256-6.
• Court’s response: Inoperative in an assessment‑basis dispute; in any case unfounded.
• Rejection notification conditions don’t vitiate the assessment procedure. [legifrance.gouv.fr]

4) Accounting error / set‑off

• A €336,763 credit vis‑à‑vis Solinjection was wrongly booked as a provision in FY 2017; corrected in FY 2018. Taxpayer sought to avoid a 2017 uplift and asked compensation under LPF L.203.
• Court: Adopts TA’s reasons and rejects the claim—no compensable “erreur de comptabilisation” for offset against the adjustments. [legifrance.gouv.fr]

5) FEC / L.47 A LPF

• Taxpayer said Luxembourg accounting standards prevented providing FEC files.
• Court: Even assuming it aimed to contest, the art. 1729 D CGI fine wasn’t recovered due to non‑cumulation of surcharges—so no effective challenge here. [legifrance.gouv.fr]

6) Findings of fact supporting “effective management in France”

• Only domiciliation in Luxembourg (SGBT; BDO Luxembourg) with no premises; multi‑tenant addresses.
• French GAAP bookkeeping indications; invoices routed back to a French accountant (Orgeval, Yvelines) giving instructions to Luxembourg providers.
• No autonomy for providers; email evidence showed French director A. D. as habitual referent; beneficial owner declarations and proxies signed in Paris; payments required A. D.’s approval; board powers subordinated to the D… family’s written agreements.
• Even if some board meetings occurred in Luxembourg and the activity required few resources, the strategic decisions and direction were in France. [legifrance.gouv.fr]

7) IS & Treaty application

• Step 1 (domestic law): Under CGI art. 209, profits of businesses exploited in France are taxable in France.
• Step 2 (treaty): Under France–Luxembourg 1958 (art. 2(3) + 4(1)), the place of effective management equals a PE (siège de direction) in France.
• Conclusion: Profits taxable in France. [legifrance.gouv.fr]

8) VAT

• Place of supply in France (CGI 259) because customers are VAT‑taxable in France and the company’s HQ of economic activity is in France; therefore Arman Innovations owes the VAT.
• Doctrine / L.80 A LPF: Cannot be invoked without relying on the L.80 A guarantee—so the doctrine plea fails. [legifrance.gouv.fr]

9) 80% “activité occulte” penalty (CGI 1728, 1‑c)

• Criteria applied: No French returns; no registration with CFE/Greffe; burden shifts to taxpayer to prove an excusable mistake if claiming full compliance abroad—assessed considering the level of foreign taxation and information exchange.
• Court’s assessment: Luxembourg regime implied significant advantage vs. French rules; taxpayer’s comparisons hypothetical (15% French rate not always available); VAT: by billing royalties from Luxembourg to a French group company, VAT was not collected by Arman (reverse‑charge neutrality at customer level).
• Outcome: No excusable error → 80% surcharge upheld. [legifrance.gouv.fr]

Checklist: “Substance & Residency” Controls (for client briefings)

• Governance location
• Board/committee meetings physically held in the claimed jurisdiction, with substantive agendas and minutes.
• Decision logs demonstrating strategic direction originates locally (not from France). [legifrance.gouv.fr]
• People & premises
• Dedicated premises and local staff (not purely domiciliation).
• Delegations of authority that are real; local officers can bind the company without off‑shore approvals. [legifrance.gouv.fr]
• Operational evidence
• Contracts, bank mandates, supplier approvals executed locally; avoid email trails showing French‑based directives.
• Accounting prepared and controlled locally; avoid French GAAP artifacts or instruction chains via French advisors. [legifrance.gouv.fr]
• Tax compliance
• IS/CT: Assess POEM exposure; if any doubt, consider French filings or protective disclosures.
• VAT: Confirm place of supply and establishment analysis; don’t assume reverse charge neutrality eliminates risk. [legifrance.gouv.fr]
• Penalties
• If operations touch France, ensure French registrations/returns to avoid occult‑activity exposure (80%) and 10‑year special reassessment windows under LPF L.169. [legifrance.gouv.fr]

Primary Sources & References

• Decision text (official): Légifrance “[CAA de VERSAILLES, 3ème chambre, 08/01/2026, 23VE00165]” (full reasons, procedures, articles cited). [legifrance.gouv.fr]
• Mirror: Juricaf synopsis page for the same decision. [juricaf.org]
• Commentary: Bornhauser Avocats blog (11 Jan 2026) summarising implications for foreign holdings run from France. [blog.bornh…avocats.fr]
• Secondary index: Doctrine page referencing the decision (note: AI‑generated summary—verify against Légifrance). [doctrine.fr]

CAA de VERSAILLES, 3rd chamber, 08/01/2026, 23VE00165, Unpublished in the Lebon collection

• https://www.legifrance.gouv.fr/ceta/id/CETATEXT000053338764?dateDecision=&init=true&page=1&query=%22article+L80+A%22+du+%22Livre+des+proc%C3%A9dures+fiscales%22&searchField=ALL&tab_selection=cetat
• https://www.legifrance.gouv.fr/ceta/id/CETATEXT000053338764?dateDecision=&init=true&page=1&query=%22article+L80+A%22+du+%22Livre+des+proc%C3%A9dures+fiscales%22&searchField=ALL&tab_selection=cetat

FRENCH REPUBLIC IN NAME OF THE FRENCH PEOPLE

Having regard to the following procedure:

Previous litigation proceedings:

Arman Innovations SA has asked the Administrative Court of Versailles to discharge, in duties and penalties, the additional corporate income tax contributions to which it was subject in respect of the financial years ended 2012 to 2017 and the value added tax reminders that were claimed from it for the period from 1 January 2014 to 31 December 2017.

By judgment no. 2102190 of 29 November 2022, the Administrative Court of Versailles rejected his request.

Proceedings before the court:

By an application registered on January 25, 2023, SA Arman Innovations, represented by Mr. Bourdeau, asks the court:

(1)To annul this judgment;

(2) To discharge, in terms of duties and penalties, the additional corporate income tax assessments imposed on it in respect of the financial years ended 2012 to 2017 and the additional value added tax to which it was subject in respect of the period from 1 January 2014 to 31 December 2017;

(3) To order the State to pay the sum of EUR 3,500 on the basis of Article L. 761-1 of the Code of Administrative Justice.

It maintains that:

- Its profits were wrongly subject to French corporation tax in respect of the financial years in dispute since its effective management was located in Luxembourg;
- It was not liable for value added tax in France on the basis of Articles 283-0 and 283-1 of the General Tax Code, as interpreted by the administrative doctrine referenced BOI-TVA-DECLA-10-10-20 n°40, since it did not have a permanent establishment in France within the meaning of the provisions applicable to value added tax, as interpreted by the judgment of the Court of Justice of the European Communities in Case C-260/95 of 20 February 1997 and by the administrative doctrine referenced BOI-TVA-CHAMP-20-50-10;
- The tax procedure is irregular, since it has not been shown that she actually received the notice of collection that the administration sent, as well as the decision rejecting the prior claim, to Mr A's address... D... instead of sending them to its registered office transferred to Paris on 22 January 2020, in breach of the provisions of Article R. 256-6 of the Book of Tax Procedures and the guarantee they establish;
- The credit of EUR 336,763 corresponding to the claim it held against Solinjection, its client, was erroneously recorded as a provision for the financial year ended in 2017 and does not constitute a management decision; the error was corrected for the financial year ended in 2018, its taxable profit for the financial year ended in 2017 should therefore not have been increased by this sum and the corresponding additional taxation is undue; this error must be compensated for with the corrections, pursuant to Article L. 203 of the Book of Tax Procedures;
- The accounts were drawn up in accordance with local Luxembourg standards, which prevented her from providing the files of the accounting entriesrequested by the tax authorities;
- The tax authorities were not justified in applying the 80% surcharge provided for in Article 1728(1)(c) of the General Tax Code, applicable in the event of the discovery of a hidden activity, since the location of its registered office in Luxembourg did not or only slightly result in a loss of tax revenue for the French Treasury and it never intended to conceal its activity.

In a statement of defence lodged on 31 May 2023, the Minister for the Economy, Finance and Industrial and Digital Sovereignty contends that the application should be dismissed.

It argues that:

-The plea alleging the irregularity of the conditions for notification of the notice of assessment, raised in the context of the present dispute over the basis of assessment, is ineffective; in any event, it is unfounded;

-The plea alleging the irregularity of the conditions for notification of the decision rejecting the prior complaint, an act in itself incapable of leading to the nullity of the tax procedure, is ineffective; in any event, it is unfounded;

- The other grounds of appeal raised are unfounded.

Having regard to the other documents in the file.

Having regard to:
- The Constitution;
- The Convention between France and the Grand Duchy of Luxembourg for the avoidance of double taxation and to establish rules for reciprocal administrative assistance in the field of income and wealth tax of 1 April 1958;
- The General Tax Code and the Book of Tax Procedures;
- The Code of Administrative Justice.

The parties were regularly notified of the day of the hearing.

The following were heard during the public hearing:
- The report of Mrs Hameau,
- And the conclusions of Mr Illouz, public rapporteur.

Considering the following:

1. The public limited company Arman Innovations, incorporated under Luxembourg law in 2012 by members of the D... family, has as its object the acquisition of shareholdings in companies of the French D... group, which carry out their activity in France in the field of soil and foundation consolidation. On 22 November 2016, it absorbed the Luxembourg holding company SA Faraday Holding, owned by the same partners, holding shares in various entities of the French group D.... On 12 July 2018, within the framework of the provisions of Article L. 16 B of the Book of Tax Procedures, the tax authorities carried out visits and seizures of documents, in particular at the Paris headquarters of the companies of the D group. and at the home of Mr and Mrs A... D... at La Celle Saint-Cloud. At the end of these operations, the department considered that the registered office of SA Arman Innovations, domiciled in Luxembourg, was fictitious, since it was in fact managed by Mr A... D... from his home in the Paris region. An audit of the accounts covering the period from 15 November 2012 to 31 December 2017 was then carried out, at the end of which the auditor considered that SA Arman Innovations, effectively managed by Mr A... D... in France, carried on an occult activity in that country. The service has, in the context of the deliberationai special recovery procedure provided for in Article L. 169 of the Book of Tax Procedures, reconstituted the turnover of the company's activity and notified the company, by proposed correction of 14 June 2019, in accordance with the ex officio taxation procedure, of the value added tax reminders for the periods from 1 January 2014 to 31 December 2017 and of the additional corporate income tax contributions for the financial years ended on 31 December of the years 2012 to 2017, with the 80% increase for concealed activity. The company appealed against the judgment of the Administrative Court of Versailles which rejected its request for relief from these additional taxes.

On the principle of taxation in France:
As regards corporation tax:

2. Although a bilateral convention concluded with a view to the avoidance of double taxation may, under Article 55 of the Constitution, lead to the disregard, on a particular point, of the national tax law, it cannot, by itself, directly serve as a legal basis for a decision on taxation. It is for the tax court, when hearing a dispute relating to such an agreement, to first place itself in the light of the national tax law in order to ascertain whether, on that basis, the contested tax has been validly established and, if so, on the basis of what classification. It is then for the Court, if necessary, by comparing that classification with the provisions of the Convention, to determine - on the basis of the pleas relied on before it or even, in order to determine the scope of the law, of its own motion - whether or not that convention precludes the application of the tax law.

3. Under Article 209 of the General Tax Code: "I." (...) profits liable to corporation tax shall be determined (...) by taking into account only the profits made in companies carried on in France (...) as well as those whose taxation is attributed to France by an international double taxation convention (...) ". Under Article 4(1) of the Franco-Luxembourg tax treaty, signed on 1 April 1958 by France and Luxembourg: "The income of companies (...) (...) are taxable only in the State in whose territory there is a permanent establishment". Article 2(3) of the same Convention provides: "(1) The term "permanent establishment" means a fixed place of business in which the enterprise carries out all or part of its activity. (2) Permanent establishments include, in particular: (a) executive chairs; (...) (4) The tax domicile of legal persons ... shall be at the place of their actual centre of management, or, if such effective management is not in either of the Contracting States, at the place where they have their registered office. (...) ". For the purposes of these provisions of the Franco-Luxembourg Convention, the place of management is understood to be the place where the persons exercising the most senior functions take the strategic decisions which determine the conduct of the affairs of that undertaking as a whole. In this respect, although the place where the boards of directors of a company are held may constitute an indication for the identification of a place of management, this element alone cannot be considered as a basis for theother elements of the file, sufficient to determine this.

4. It is apparent from the investigations carried out by the administration in the context of the home visits and the audit of the accounts of the applicant company that the latter provided website management services on behalf of its subsidiary Eeconomiste, and received royalties invoiced to SA Solinjection, under a patent licence grant. The tax authorities also noted that SA Arman Innovations did not have premises in Luxembourg but was only domiciled there with providers of domiciliation, accounting and management services, namely Société Générale Bank et Trust and the accounting firm BDO Luxembourg, at successive addresses, shared with several dozen other companies. The tax authorities also found that the company's accounts were kept in accordance with French standards and that certain invoices issued by a French supplier addressed to Luxembourg accounting service providers had been forwarded to France, to an accounting firm located in Orgeval in the Yvelines department from which these service providers took the instructions. Documents seized from the home of Mr. A... D... revealed that Société Générale Bank et Trust and the accounting firm BDO did not have any decision-making autonomy to commit their client or to draw up the accounting and legal documents relating to the company's activity in an autonomous and definitive manner, the company BDO Luxembourg, in particular, playing only a subordinate role in the management of this company. Mr. A... D... was their usual referent, as shown in particular by email exchanges found at his home. The administration also noted that the declarations of real beneficiaries and the powers of attorney seized were all signed in Paris and that the powers conferred apparently on Mr B... C... as Chairman of the Board of Directors of the company were limited, in particular since the payment of suppliers was made only after approval by Mr A... D... and that, in general, the powers of the directors to bind the company were subject to the written agreement of the members of the D family.... Finally, it was in Paris, on 27 December 2016, that the shareholders of SA Arman Innovations signed "declarations of beneficial owners" in which each of them declared, with a view to an extraordinary general meeting, to be the "real economic beneficiary" of this company, i.e. to own or control it. In the light of all these factors, even if the company did not have premises in France, its activity did not require human and material resources, or if boards of directors could have been held in Luxembourg, the administration was entitled to consider that the applicant was carrying out in France a hidden activity of providing website management and collecting royalties in France, by being directed de facto by Mr A... D... from his domicile in France, characterizing the place of effective management of this company, which correspondingly did not have one in Luxembourg.

5. In these circumstances, the tax authorities established that Arman Innovations, whose effective management was carried out from France, should be regarded as a company carried on in France within the meaning of Article 209 of the General Tax Code and as having a "place of management" in France at the domicile of its director constituting a "permanent establishment" within the meaning of the Franco-Luxembourg tax treaty. The tax authorities were therefore right to decide to tax their profits there.

As regards VAT:

6. Under Article 256 of the General Tax Code, in the version applicable to the dispute: "I. The supply of goods and services effected for consideration by a taxable person acting as such shall be subject to value added tax (...)". Under Article 256 A of the same code: "Persons who independently carry out one of the economic activities mentioned in the fifth paragraph, regardless of the legal status of these persons, their situation with regard to other taxes and the form or nature of their intervention (...) The economic activities referred to in the first subparagraph shall be defined as all activities of a producer, trader or supplier of services ... ". Under Article 259 of the General Tax Code, relating to value added tax and applicable from 1 January 2010: "The place of supply of services is located in France: / 1° When the customer is a taxable person acting as such and has in France: / a) The place of his economic activity, except when it has a permanent establishment not located in France to which the services are provided; / b) Or a permanent establishment to which the services are provided; / c) Or, in the absence of a or b, his domicile or habitual residence; (...) ". Article 283 of the General Tax Code provides: "1. Value added tax must be paid by the persons who carry out the taxable transactions (...) / However, where a supply of goods or services referred to in Article 259 A is made by a taxable person established outside France, the tax shall be paid by the purchaser, the recipient or the customer who acts as a taxable person and who has a value added tax identification number in France ... Finally, Article 283-0 of the same code provides: "For the purposes of Articles 283 to 285 A, a taxable person who makes a supply of goods or services taxable in France and who has a permanent establishment there which is not involved in the making of that supply or service shall be considered to be a taxable person established outside France."


7. In the first place, it is common ground that the companies to which Arman Innovations supplied the services at issue are subject to value added tax in France and that they have their place of business there. The place of supply of services by the applicant company is therefore in France, within the meaning of Article 259 of the General Tax Code.


8. In the second place, it follows from the foregoing that Arman Innovations, whose strategic decisions were adopted by Mr A... D... in France, has in France the headquarters of its economic activity. Consequently, the tax authorities were right to consider that Arman Innovations, which provided these services, was liable for the corresponding value added tax.

9. Finally, the appellant cannot rely on the benefit of the administrative doctrine when it does not rely on the guarantee provided for in Article L. 80 A of the Book of Tax Procedures.

On the regularity of the taxation procedure:

10. The irregularity of the notification of the notice of recovery of the disputed taxes, in the absence of a challenge to the administration's right of recovery, cannot be usefully raised in the context of the present dispute over the basis of assessment. Moreover, the conditions for notification of the decision rejecting the prior complaint have no impact on the regularity of the procedure. It follows from this that the applicant company cannot usefully rely on the fact that these two documents were addressed to the domicile of Mr D... rather than its Luxembourg headquarters.

On the merits of the charges:

11. It is appropriate, by adopting the reasons rightly given by the court, to dismiss the claim invoked at first instance and taken up on appeal for rectification of the accounting error in the provision on exceptional charge of the credit, issued in 2017 by the company to Solinjection for an amount of EUR 336,763 and its set-off against the disputed corrections pursuant to Article L. 203 of the Book of Documents. tax procedures.

On penalties:

12. SA Arman Innovations, which argues that it could not be required to submit files of accounting entries pursuant to Article L. 47 A of the Book of Tax Procedures, cannot, assuming that it intended to do so, effectively challenge the fine provided for in Article 1729 D of the General Tax Code which was not collected because of the principle of non-cumulation of tax surcharges.

13. Under Article 1728 of the General Tax Code, in the version applicable to the present dispute: "1. Failure to file within the prescribed time limits a declaration or a document containing an indication of the elements to be taken into account for the assessment or assessment of the tax shall result in the application, on the amount of the duties payable by the taxpayer or resulting from the declaration or document filed late, an increase of: (...) c. 80% in the event of the discovery of a concealed activity. ". It follows from these provisions that in the event that a taxpayer has neither filed within the legal period the declarations that he was required to submit, nor has he made his activity known to a centre for business formalities or to the clerk of the commercial court, the administration must be deemed to provide proof, which is incumbent on it, of the concealed exercise of the professional activity if the taxpayer is not himself able to establish that he has made an error justifying that he has not fulfilled any of these reporting obligations. However, in the case of a taxpayer who claims that he has fulfilled all his tax obligations in a State other than France, the justification for the error committed must be assessed by taking into account both the level of taxation in that other State and the arrangements for exchanging information between the tax authorities of the two States.

14. Thus As stated above, Arman Innovations, although having its registered office in Luxembourg, has its place of effective management in France and must therefore be regarded as taxable in respect of all its operations in France. Secondly, it is common ground that Arman Innovations did not file in respect of the financial years at issue any of the corporate income tax returns which it was required to submit on account of its taxable activity in France, nor did it make that activity known to a centre for business formalities or to the clerk of the commercial court. Although the company claims that the location of its registered office in Luxembourg has not or only slightly resulted in a loss of tax revenue for the French Treasury, however, as the court rightly pointed out, it is clear from its own pleadings that the exemption of 80% of gross income provided for by Luxembourg legislation entails an advantage of 8.6% of taxable income, compared with what would be the taxation of the same income pursuant to Article 39 terdecies of the General Tax Code. The company does not dispute that, as the tax authorities point out, the comparison it makes is hypothetical, insofar as it is systematically based on a tax rate of 15% in France, even though it was not eligible for it for part of the period under review. Moreover, since, contrary to what the company has claimed, it was in fact liable for value added tax in France and the department rightly argues that by artificially charging royalties from Luxembourg to a French company in the same group, the audited company was able to refrain from collecting value added tax, the latter being collected by a client for whom, under the reverse charge mechanism, the transaction is neutral. In these circumstances, Arman Innovations cannot be regarded as having mistaken the scope of its tax obligations vis-à-vis the tax authorities and it is therefore right that the tax authorities applied a surcharge for concealed activity.

15. It follows from the foregoing that SA Arman Innovations is not justified in claiming that the General Court erred in rejecting its claim in the judgment under appeal. His claims in discharge must therefore be rejected as well as, consequently, his claims for the purpose of applying the provisions of Article L. 761-1 of the Code of Administrative Justice.

D E C I D E :

Article 1: The application of SA Arman Innovations is dismissed.
Article 2: This judgment shall be notified to SA Arman Innovations and to the Minister of the Economy, Finance and Industrial, Energy and Digital Sovereignty.
Deliberated after the hearing of December 16, 2025, at which sat:

Mrs. Besson-Ledey, president,
Mrs. Marc, president-assessor,
Mrs. Hameau, first counsel.

Made public by making it available to the registry on January 8, 2026.

The rapporteur,
Mr Hameau The chairman,
L. Besson-Ledey
The Registrar,
T. TollimThe Republic requests and orders the Minister of the Economy, Finance and Industrial, Energy and Digital Sovereignty as far as it is concerned or any commissioners of justice as required with regard to ordinary law remedies against private parties, to provide for the execution of this decision.
N° 23VE00165 2

End