@@ -1,6 +1,7 @@
 import argparse
 import functools
 import os
+import pathlib
 import re
 import sys
 import textwrap
@@ -298,12 +299,17 @@ def _parse_value(v: Any) -> Any:
         return v[1:]
     if isinstance(v, str) and v.startswith("@"):
         # If the user-provided value starts with @, we try to read the file
-        # path provided after @ as the real value. Exit on any error.
+        # path provided after @ as the real value.
+        filepath = pathlib.Path(v[1:]).expanduser().resolve()
         try:
-            with open(v[1:], encoding="utf-8") as f:
+            with open(filepath, encoding="utf-8") as f:
                 return f.read()
-        except Exception as e:
-            sys.stderr.write(f"{e}\n")
+        except UnicodeDecodeError:
+            with open(filepath, "rb") as f:
+                return f.read()
+        except OSError as exc:
+            exc_name = type(exc).__name__
+            sys.stderr.write(f"{exc_name}: {exc}\n")
             sys.exit(1)
 
     return v
 
@@ -540,12 +540,15 @@ def test_update_application_settings(gitlab_cli):
     assert ret.success
 
 
-def test_create_project_with_values_from_file(gitlab_cli, tmpdir):
+def test_create_project_with_values_from_file(gitlab_cli, fixture_dir, tmpdir):
     name = "gitlab-project-from-file"
     description = "Multiline\n\nData\n"
     from_file = tmpdir.join(name)
     from_file.write(description)
     from_file_path = f"@{str(from_file)}"
+    avatar_file = fixture_dir / "avatar.png"
+    assert avatar_file.exists()
+    avatar_file_path = f"@{avatar_file}"
 
     cmd = [
         "-v",
@@ -555,6 +558,8 @@ def test_create_project_with_values_from_file(gitlab_cli, tmpdir):
         name,
         "--description",
         from_file_path,
+        "--avatar",
+        avatar_file_path,
     ]
     ret = gitlab_cli(cmd)
 
 
@@ -1,9 +1,9 @@
 import argparse
+import contextlib
 import io
 import os
 import sys
 import tempfile
-from contextlib import redirect_stderr  # noqa: H302
 from unittest import mock
 
 import pytest
@@ -62,7 +62,7 @@ def test_cls_to_gitlab_resource(class_name, expected_gitlab_resource):
 )
 def test_die(message, error, expected):
     fl = io.StringIO()
-    with redirect_stderr(fl):
+    with contextlib.redirect_stderr(fl):
         with pytest.raises(SystemExit) as test:
             cli.die(message, error)
     assert fl.getvalue() == expected
@@ -90,12 +90,11 @@ def test_parse_value():
     os.unlink(temp_path)
 
     fl = io.StringIO()
-    with redirect_stderr(fl):
+    with contextlib.redirect_stderr(fl):
         with pytest.raises(SystemExit) as exc:
             cli._parse_value("@/thisfileprobablydoesntexist")
-        assert (
-            fl.getvalue() == "[Errno 2] No such file or directory:"
-            " '/thisfileprobablydoesntexist'\n"
+        assert fl.getvalue().startswith(
+            "FileNotFoundError: [Errno 2] No such file or directory:"
         )
         assert exc.value.code == 1