Judgment of the Bordeaux Administrative Court of Appeal, 16 September 2025
Under Article 259 A, 1° a of the French Tax Code, short-term rentals of means of transport are subject to French VAT when the vehicle is made available to the lessee on French territory.
In this case, a French company had concluded bicycle rental agreements with tour operators based in the Netherlands, the United Kingdom, and Germany. The contracts, each with a six-month duration, stipulated a minimum number of bicycles, which could be allocated to different clients of the tour operators, and a minimum remuneration of €400 per bicycle.
In practice, the tour operators’ end customers used the bicycles for periods of less than 30 days. Based on this, the French Tax Authorities argued that these rentals should be subject to French VAT.
However, the Administrative Court of Appeal ruled that the rentals were not subject to French VAT, taking into account the contractual relationship between the French company and the foreign tour operators and the absence of a direct contract with the end users.
The Court clarified that, had the dispute concerned rentals made by the foreign tour operators to their end customers for periods under 30 days, the French Tax Authorities would likely have been entitled to apply VAT.
