French Administrative Court of Montreuil Issues Jurisprudence Letter on VAT Exemption for In-Kind Shareholder Contributions

The French Administrative Court of Montreuil Oct. 15 issued Jurisprudence Letter No. 20, clarifying the VAT treatment of shareholder contributions in kind, as discussed in Decision No. 2218203. The taxpayer, a public entity, sought to reduce VAT arrears and late payment interest associated with its provision of computing capacity and storage space to its subsidiary. The taxpayer argued that the provision was a shareholder contribution made in kind in fulfillment of a partnership obligation and not subject to VAT. Upon review, the Administrative Court found that: 1) the taxpayer proved that the contribution was made without charge and was, therefore, ...