No 5.5% VAT for home hosting outside hotel competition

The Conseil d'État (9ème et 10ème chambres réunies, 30 September 2026, n° 508344)Legifrance quashed the Nantes appeal court's grant of the 5.5% reduced VAT rate to a couple running home-based hosting of protected adultsLegifrance (accueil et hébergement à leur domicile de personnes majeures protégées), and sent the case back to that court. The dispute concerned VAT reassessments for 1 January 2003 to 31 December 2010: the Rennes tribunal had largely upheld them in October 2024, and the Nantes court in July 2025 discharged the portion corresponding to the gap between the standard rate applied by the tax administration and the 5.5% rate of article 279-a of the code général des impôts, plus the related penalties.

The ruling turns on the scope of article 279-a CGI, in its wording applicable to the period, which taxes at 5.50% the prestations relating to the fourniture de logement and three quarters of the price of pension or demi-pension in établissements d'hébergement, with furnished lettings taxed under the same conditions. Read in light of the VAT directives it transposes (directive 77/388/CEE for the first part of the period, directive 2006/112/CE for the second, whose Annex III point 12 covers lodging supplied in hotels and similar establishments), those accommodation and catering services mean services supplied by hotel establishments or businesses performing a similar functionLegifrance — that is, businesses whose services are in potential competition with those of hotelsLegifrance.

The Nantes court had held that the couple carried on a commercial activity of hébergement avec pension within the second alinéa of article 279-a, even though their home-based hosting of protected adults was not that of a hotel establishment and did not compete with hotel-type accommodation. That, the Conseil d'État holds, is an error of law, and it annuls articles 1 and 2 of the appeal judgmentLegifrance without needing to rule on the minister's other grounds (whether the reduced rate could cover the whole of the pension services, and the subsidiary qualification under the third alinéa). The couple's claim for 5,000 euros against the State under article 37 of the loi du 10 juillet 1991 fails, the State not being the losing party.

For advisers, the operative test is now restated plainly: home hosting of protected adults that does not enter into potential competition with hotel establishments cannot support the 5.5% rate under the second alinéa of article 279-a CGILegifrance. Note the period sensitivity: current administrative doctrine taxes ordinary accommodation services under article 279-a at 10%, with the 5.5% rate reserved to the listed vulnerable-public settings (notably elderly or disabled establishments under article 278-0 bis-C and résidences hôtelières à vocation sociale d'intérêt général) — so the reasoning should be checked against the rate wording applicable to each client's own period.

Legal basis: Conseil d'État, 9ème et 10ème chambres réunies, 30/09/2026, n° 508344 (ECLI:FR:CECHR:2026:508344.20260930)Legifrance; code général des impôts, article 279-a; directive 77/388/CEE, article 12-3 and Annex H point 11; directive 2006/112/CE, article 98 and Annex III point 12.