{"id":32021,"date":"2026-02-11T15:26:09","date_gmt":"2026-02-11T14:26:09","guid":{"rendered":"https:\/\/www.fbt-avocats.ch\/?p=32021"},"modified":"2026-02-11T15:29:59","modified_gmt":"2026-02-11T14:29:59","slug":"a-threat-to-foreign-holding-companies-owned-by-french-residents","status":"publish","type":"post","link":"https:\/\/www.fbt-avocats.ch\/en\/a-threat-to-foreign-holding-companies-owned-by-french-residents\/","title":{"rendered":"A Threat to Foreign Holding Companies Owned by French Residents"},"content":{"rendered":"<div  data-size='featured_large'  data-lightbox_size='large'  data-animation='slide'  data-conditional_play=''  data-ids='32012'  data-video_counter='0'  data-autoplay='false'  data-bg_slider='false'  data-slide_height=''  data-handle='av_slideshow'  data-interval='5'  data-class=' avia-builder-el-0  el_before_av_heading  avia-builder-el-first   '  data-css_id=''  data-scroll_down=''  data-control_layout='av-control-default'  data-custom_markup=''  data-perma_caption=''  data-autoplay_stopper=''  data-image_attachment=''  data-min_height='0px'  data-default-height='42'  class='avia-slideshow avia-slideshow-1  av-control-default av-default-height-applied avia-slideshow-featured_large av_slideshow  avia-builder-el-0  el_before_av_heading  avia-builder-el-first    avia-slide-slider '  itemprop=\"ImageObject\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\" ><ul class='avia-slideshow-inner ' style='padding-bottom: 52.333333333333%;' ><li  class=' av-single-slide slide-1 ' ><div data-rel='slideshow-1' class='avia-slide-wrap '   ><img src='https:\/\/www.fbt-avocats.ch\/wp-content\/uploads\/2026\/02\/Tax-Focus-Alain-Moreau-threat-foreign-holding-companies-french.png' width='1200' height='628' title='Tax-Focus-Alain-Moreau-threat-foreign-holding-companies-french' alt=''  itemprop=\"thumbnailUrl\"   \/><\/div><\/li><\/ul><\/div>\n<div style='padding-bottom:10px; font-size:26px;' class='av-special-heading av-special-heading-h1  blockquote modern-quote  avia-builder-el-1  el_after_av_slideshow  el_before_av_hr   av-inherit-size '><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >A Threat to Foreign Holding Companies Owned by French Residents<\/h1><div class ='av-subheading av-subheading_below  ' style='font-size:15px;'><p>Tax Focus &#8211; February 2026<br \/>\nAlain Moreau<\/p>\n<\/div><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div>\n<div style='height:30px' class='hr hr-invisible   avia-builder-el-2  el_after_av_heading  el_before_av_button  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class='avia-button-wrap avia-button-left  avia-builder-el-3  el_after_av_hr  el_before_av_hr  '><a href='https:\/\/www.fbt-avocats.ch\/wp-content\/uploads\/2026\/02\/FBT-Tax-Focus-February2026.pdf'  class='avia-button   avia-icon_select-no avia-color-theme-color avia-size-large avia-position-left '  target=\"_blank\"   ><span class='avia_iconbox_title' >Download pdf <\/span><\/a><\/div>\n<div style='height:30px' class='hr hr-invisible   avia-builder-el-4  el_after_av_button  el_before_av_textblock  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '   itemprop=\"text\" ><p>For several years, the French tax administration has intensified its scrutiny of holding companies owned by French tax residents. These companies are accused of having their place of effective management in France due to an alleged lack of sufficient substance abroad. This position is increasingly supported by case law, as illustrated by a recent decision rendered by the Versailles Administrative Court of Appeal on 8 January 2026.<\/p>\n<p>In this case, a Luxembourg holding company created by a French family to hold shares in subsidiaries and patents, was at the heart of the controversy. The holding company, receiving passive income in the form of dividends, interest, and royalties, was accused by the tax administration of being, in reality, a French tax resident.<\/p>\n<p>The company\u2019s defense relied on several points: holding its board meetings in Luxembourg, the absence of premises in France, and the fact that its activities did not require significant human or material resources. However, the Court held that these arguments were insufficient to contest the tax reassessment.<\/p>\n<p>The Court\u2019s decision was based on several findings: firstly, although domiciled in Luxembourg, the company had no resources of its own there, as all its services were provided by external service providers. Secondly, one of the shareholders, a French resident and director, played a central role in steering and validating decisions, indicating a degree of dependence on France. Thirdly, the Luxembourg service providers lacked decision-making autonomy and acted on the instructions of a French accounting firm.<\/p>\n<p>Another controversial aspect of the case lies in the application of the 80% penalty for undisclosed activity, notwithstanding the fact that tax returns had been duly filed in Luxembourg. This decision raises concerns regarding freedom of establishment within the European Union, particularly concerning passive holding companies.<\/p>\n<p>The Court sided with the tax administration, emphasizing a strict material interpretation of the substance required for a company to be considered as tax resident abroad, while disregarding its immaterial substance. It thus seems to demand more material substance from foreign holding companies (notably offices and employees) than it does from passive French holding companies. It is, however, unrealistic to consider that a holding company limited to receiving passive income (notably dividends or royalties) requires dedicated logistics, which are often entirely unnecessary given its actual activities as a purely passive holding company.<\/p>\n<p>Legal, banking and accounting professionals must therefore be particularly vigilant in light of the tightening approach observed in France. The Conseil d\u2019Etat, France\u2019s supreme administrative court, is expected to rule on this issue soon, and it is hoped that it will set clear guidelines capable of securing cross-border structuring schemes.<\/p>\n<\/div><\/section>\n<section class=\"av_textblock_section \"  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock  '   itemprop=\"text\" ><p style=\"text-align: right;\"><a href=\"https:\/\/www.fbt-avocats.ch\/en\/portfolio-item\/alain-moreau\/\">Alain Moreau<\/a><br \/>\nPartner, Paris<\/p>\n<\/div><\/section>\n<div style='padding-bottom:10px; font-size:20px;' class='av-special-heading av-special-heading-h3  blockquote modern-quote modern-centered  avia-builder-el-7  el_after_av_textblock  el_before_av_hr   av-inherit-size '><h3 class='av-special-heading-tag '  itemprop=\"headline\"  >Share on LinkedIn<\/h3><div class='special-heading-border'><div class='special-heading-inner-border' ><\/div><\/div><\/div>\n<div style='height:50px' class='hr hr-invisible   avia-builder-el-8  el_after_av_heading  el_before_av_one_fifth  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding first  avia-builder-el-9  el_after_av_hr  el_before_av_one_fifth  \" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-10  el_after_av_one_fifth  el_before_av_one_fifth  \" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-11  el_after_av_one_fifth  el_before_av_one_fifth  \" style='border-radius:0px; '><div class='av-social-sharing-box  avia-builder-el-12  avia-builder-el-no-sibling   '><div class='av-share-box'><ul class='av-share-box-list noLightbox'><li class='av-share-link av-social-link-linkedin' ><a target='_blank' href='https:\/\/linkedin.com\/shareArticle?mini=true&amp;title=A%20Threat%20to%20Foreign%20Holding%20Companies%20Owned%20by%20French%20Residents&amp;url=https:\/\/www.fbt-avocats.ch\/en\/a-threat-to-foreign-holding-companies-owned-by-french-residents\/' aria-hidden='true' data-av_icon='\ue8fc' data-av_iconfont='entypo-fontello' title='' data-avia-related-tooltip='Share on Linkedin'><span class='avia_hidden_link_text'>Share on Linkedin<\/span><\/a><\/li><\/ul><\/div><\/div><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-13  el_after_av_one_fifth  el_before_av_one_fifth  \" style='border-radius:0px; '><\/div>\n<div class=\"flex_column av_one_fifth  flex_column_div av-zero-column-padding   avia-builder-el-14  el_after_av_one_fifth  el_before_av_hr  \" style='border-radius:0px; '><\/div>\n<div style='height:50px' class='hr hr-invisible   avia-builder-el-15  el_after_av_one_fifth  avia-builder-el-last  '><span class='hr-inner ' ><span class='hr-inner-style'><\/span><\/span><\/div>\n","protected":false},"excerpt":{"rendered":"<p>For several years, the French tax administration has intensified its scrutiny of holding companies owned by French tax residents.<\/p>\n","protected":false},"author":26,"featured_media":28955,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[655,85],"tags":[2203],"datespeciale":[],"yst_prominent_words":[848,1490,1468,1083,932,925,862,1091,1074,1085],"class_list":["post-32021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-publications","tag-tax-focus-en","competences-tax","auteurs-alain-moreau-en","date-publication-2224","diffusion-groupe-fiscal-en","diffusion-news-en","diffusion-publications-en"],"_links":{"self":[{"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/posts\/32021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/comments?post=32021"}],"version-history":[{"count":2,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/posts\/32021\/revisions"}],"predecessor-version":[{"id":32025,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/posts\/32021\/revisions\/32025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/media\/28955"}],"wp:attachment":[{"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/media?parent=32021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/categories?post=32021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/tags?post=32021"},{"taxonomy":"datespeciale","embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/datespeciale?post=32021"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.fbt-avocats.ch\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=32021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}