The issue of stable establishment (often abbreviated as "SE") is at the heart of the tax challenges faced by international companies. For start-ups, innovative companies, or executives operating across multiple countries, the recognition of a stable establishment in France can profoundly transform the applicable taxation.

On June 25, 2026, the Administrative Court of Appeal of Toulouse issued an important ruling in the case of Sté Ceremed Swiss (n° 24TL01882), confirming the existence of a stable establishment in France for a Swiss company and dismissing any procedural irregularity regarding the notification of the recovery notice (AMR).

This ruling illustrates the heightened vigilance of the French tax administration and underscores the importance of rigorous legal and tax structuring for any foreign company conducting business in France.

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Understanding the concept of stable establishment: a central tax issue

A stable establishment refers, according to international tax law, to a fixed place of business through which a company carries out all or part of its activities. In practice, this means that a foreign company may be taxed in France if it has, on the territory, sufficient material or human organization to carry out an autonomous activity.

The criteria are often assessed based on a set of indicators:

location of management decisions,
presence of a representative with the authority to bind the company,
maintenance of accounting records in France,
actual or not domicile of the foreign headquarters.

These criteria, although seemingly simple, give rise to numerous interpretations. The decision of the CAA of Toulouse provides a concrete illustration.

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The facts: a Swiss company managed from France

In the case of Ceremed Swiss, the company was legally domiciled in Switzerland. However, the French tax administration deemed that it had a stable establishment in France.

The reasoning is based on several consistent elements:

the "head office" located in Switzerland was merely a domiciliation address without real activity;

a visit and seizure conducted in France (based on article L. 16 B of the Tax Procedure Book) revealed all accounting and commercial documents at the representative's home;

the bylaws mentioned administration from France, and the representative spent about 75% of his time there.

These indicators led the court to confirm the administration's position: the company was indeed conducting its management activities from France.

The fact that the executive resided in Morocco for part of the period was not sufficient to challenge this conclusion.

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Double taxation and absence of amicable recourse: a procedural reminder

The company argued that such taxation resulted in double taxation, already covered by Swiss taxation.

However, the court noted that it had not taken any steps with the competent authorities to resolve this tax conflict, as provided for in Article 27 of the Franco-Swiss tax treaty.

This failure to resort to amicable procedures led the court to reject this argument.

In practice, this serves as a reminder that in the event of disputes of this nature, international conventional mechanisms must be actively utilized by taxpayers. They provide essential protection against double taxation but require formal actions, often governed by strict deadlines.

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Notification of the AMR: no procedural irregularity

The second argument raised by the company concerned the regularity of the notification of the recovery notice (AMR).

The administration had sent it to the French address of the stable establishment, while the registered office was in Switzerland and the company had chosen to domicile with its Swiss counsel.

However, the court ruled that this notification, even if tainted by an irregularity, did not affect either the regularity of the taxation procedure or the validity of the tax decision.

In other words, an error in the notification may impact the prescription or enforceability of the tax, but not the validity of the adjustment itself.

This distinction, established by article L. 281 of the Tax Procedure Book, is fundamental: disputes related to the taxation procedure and those related to tax collection do not follow the same rules.

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Practical lessons for start-ups and international companies

This decision urges foreign companies with a presence in France, even if limited, to exercise caution. For start-ups and executives, three major lessons can be drawn:

1. Ensure consistency between economic reality and legal domiciliation

A domiciliation abroad is not sufficient to rule out a stable establishment in France if effective management or decision-making occurs there.

Tax authorities examine the facts: where are the teams located, where are contracts signed, where are records kept?

2. Document the distribution of functions

Maintaining evidential documentation (service contracts, tracking of flows, justification of the location of executives) is essential to demonstrate the reality of an activity abroad.

A vague approach exposes the company to a tax requalification and significant adjustments.

3. Use international procedures in case of disputes

In the event of double taxation, it is imperative to resort to the amicable procedure provided for by the bilateral treaty.

Failing to do so deprives the company of an effective means to resolve the conflict and may lead to a difficult-to-recover dispute.

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A context of increased scrutiny for cross-border structures

This case illustrates an underlying trend: the French tax administration increases its oversight of foreign companies effectively operating from France.

Digital technologies and remote work make this analysis more complex, but also more frequent.

Start-ups, particularly those in the digital sector, are especially exposed.

An activity seemingly "exported" can actually be considered French as soon as the operational management, strategic decisions, or accounting administration are located in France.

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Support from a specialized law firm

Determining the concept of stable establishment and anticipating its consequences requires a multidisciplinary approach.

At PRAX Avocats, our team supports international companies, start-ups, and executives in the legal and tax structuring of their activities, both in France and abroad.

Our expertise in business law, French and international taxation, labor law, and intellectual property allows us to provide comprehensive and coherent support.

On specialized topics such as social law or complex technology contracts, we collaborate with partner firms ("Best Friends") renowned for their excellence in these areas.

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Conclusion: anticipate to secure international growth

The ruling of the CAA of Toulouse on June 25, 2026 reminds us of the rigor with which French jurisdictions assess the concept of stable establishment.

For innovative and internationally oriented companies, the challenge is clear: align operational reality with legal structuring, anticipate tax risks, and prepare solid documentation.

Beyond compliance with obligations, this approach secures investments, avoids double taxation, and establishes a transparent relationship with administrations.

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Contact the PRAX Avocats firm, specialist in French and international taxation as well as business law.

On social law, intellectual property, or complex contracts, we work with our trusted partner firms to provide you with comprehensive and tailored support.

Stable establishment in France of a Swiss company: insights on a key decision by the Administrative Court of Appeal of Toulouse.