France: Luxembourgish holding company treated as French tax resident (Court of Appeal decision)
Company’s effective management exercised from France
The Administrative Court of Appeal of Versailles on January 8, 2026, held that a Luxembourgish holding company was effectively resident and taxable in France.
Summary
The Luxembourgish holding company managed patents and shares for a French group. The French tax authorities concluded that the company’s Luxembourgish registered office was fictitious and that the company’s effective management was exercised from France.
The court agreed with the tax authorities, finding that the holding company had no real substance in Luxembourg since it had no dedicated premises, employees, or autonomous decision-making capacity, and was merely domiciled with service providers lacking authority to manage the company. By contrast, strategic decisions, approvals, and day-to-day management were exercised by a French-based director, who was also the controlling shareholder.
Read a February 2026 report prepared by KPMG’s EU Tax Centre