Article 261 B of the French General Tax Code applies to services provided by associations of individuals or legal entities whose business is not subject to VAT to the members (including financial institutions) of the association. These services can be exempted from VAT if they are related only to the business, not subject to VAT, of the association members and if the price required corresponds precisely to their share in the common expenses...
The Nantes Administrative Court of Appeal decided on 4 May 1994 that a company, held at 97. 40 % by a bank and providing this bank and its branches with computer services, could not benefit from the VAT exemption, notwithstanding that they may constitute an association, insofar as, the business of the company, computer services, is subject to VAT.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. For additional information contact Claire Acard on +33 (1) 55 61 10 10. The members of ARCHIBALD ANDERSEN Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar.
Copyright Mondaq Ltd 1995 Tel +44 171 820 7733.