Bordeaux Administrative Court of Appeal judgment, 19 May 2026, no. 25BX00295
The court confirmed that VAT reverse charge applicable to building works carried out as a subcontractor (French Tax Code article 283, 2 nonies) requires demonstrating genuine subcontractor status.
A construction company had applied the reverse charge mechanism to services provided as part of building work. The Tax Authority rejected this, arguing that the conditions qualifying the transaction as subcontracting were not met.
The court reaffirmed that reverse charge applies only to transactions that genuinely meet the definition of subcontracting. It must be demonstrated that construction services are being performed on behalf of a main contractor, executing part of the overall works assigned to them. This is distinct from simply supplying services as an independent provider.
In this case, the company’s documentation failed to establish the reality of a genuine subcontracting chain. Contractors should therefore retain supporting evidence: contracts, purchase orders, work agreements, and detailed descriptions of the services performed.
