Last update of this article: November 13, 2025
Decision of 30 September 2025, No. 490793
This recent ruling of the Conseil d’État (France) is directly relevant for French operators who make royalty or service payments to non-resident beneficiaries and question the application of the withholding tax under Article 182 B of the French General Tax Code (CGI) in the light of double-taxation treaties.
Focus – Case law and context
Our firm assists both individuals and companies in applying international tax treaties designed to avoid double taxation.
These treaties are at the core of many cross-border situations – dividends, royalties, service fees, salaries and pensions.
The Conseil d’État decision of 30 September 2025 illustrates the importance of a rigorous interpretation of the concept of tax residency as used in treaties based on the OECD Model.
Below are the key points of the decision and its practical implications.
Withholding tax – principle and treaty relief
Under French domestic law, Article 182 B of the General Tax Code provides for a withholding tax on amounts paid by a French debtor to persons or companies without a permanent establishment in France, in consideration of services used in France.
This withholding tax is levied at the standard corporation tax rate set out in Article 219 (I, second paragraph) of the CGI.
However, bilateral tax treaties may eliminate or limit this taxation by allocating the right to tax to the beneficiary’s State of residence under Articles 12 (royalties) or 7 (business profits) of the OECD Model Convention.
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CONTACT USThe dispute before the Conseil d’État
A French press agency had paid royalties in 2014 to a Dutch company for the use of photographic rights.
The French tax authorities, treating these amounts as French-source income, applied the withholding under Article 182 B CGI.
The company argued that under the France–Netherlands tax treaty of 16 March 1973 the royalties were taxable only in the Netherlands if the recipient was a resident there and produced a certificate of residence issued by the Dutch tax administration.
Both the Administrative Court and the Paris Court of Appeal dismissed the claim, holding that the certificate did not prove effective taxation in the Netherlands.
On further appeal , the company prevailed before the Conseil d’État.
The decision of the Conseil d’État
The Conseil d’État recalled that Article 4 of the treaty defines a resident as “any person, individual or legal entity, who is liable to tax in a Contracting State by reason of domicile, residence, place of management or any other similar criterion.”
This requirement refers to a person’s being subject to tax under the law, irrespective of actual payment of tax.
Requiring proof of effective taxation would add a condition not found in the treaty.
The certificate of residence issued by the Dutch tax authorities is therefore sufficient proof: the company must be regarded as a resident of the Netherlands, and the royalties could not be subject to withholding in France.
Accordingly, the Conseil d’État overrode the lower court’s decision and ordered that the withholding tax be cancelled.
A fundamental principle confirmed
The ruling reaffirms that it is enough to be liable to tax in the State of residence to benefit from the treaty – actual payment is not required.
This approach is in line with the OECD Model, which bases residence on unlimited tax liability under domestic law, not on the payment of a specific tax.
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CONTACT USPractical implications
In light of the principle set out in this decision, French entities paying royalties or fees to foreign beneficiaries should:
- verify whether a tax treaty exists with the beneficiary’s State of residence and identify the relevant provisions for the type of income concerned;
- confirm that exemption at source is allowed under the treaty and that the beneficiary is indeed within the scope of taxation in that State (even if no tax is effectively paid);
- obtain an up-to-date certificate of residence from the beneficiary’s tax authorities;
- retain this certificate to demonstrate compliance and to avoid application of Article 182 B CGI withholding in the event of a tax audit.
This clarification by the Conseil d’État strengthens legal certainty in cross-border transactions and confirms the primacy of tax treaties over domestic law.
Official references
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CONTACT USNo. The Conseil d’État made clear that it is enough to be liable to tax under the law of that State; no actual payment is required.
Yes. A certificate issued by the competent tax authority is sufficient evidence of treaty residence.
Those based on the OECD Model Convention, particularly Articles 4, 7 and 12.
Obtain a valid certificate of residency, check liability to tax in the beneficiary’s State and keep records for possible audits.
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The opinion expressed in this article is for informational purposes only.
This article does not constitute legal advice.
In addition, it is important to remind that each client’s tax issue is different because each client’s personal situation is different.
Should you have a similar tax issue, please contact us for an initial discussion of your case.