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Fund Taxation alert 2017-01

Fund Taxation alert 2017-01



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Withholding tax reclaims in France – French Administrative Supreme Court clarifies the application of new provisions on tacit rejections


Pursuant to the provisions of the French Law on Tax Procedures (Livre de Procédure Fiscale or “LPF”), the French Tax Authorities may reject a tax claim either explicitly or tacitly, the latter being understood as occurring once a six-month period has elapsed from the filing date without a decision having been issued.

In practice, such a difference is relevant since, under French law, there is no deadline to file an appeal against a tacit rejection before the administrative tax court (Tribunal Administratif). Conversely, where a claim has been explicitly rejected by the Tax Authorities, the claimant must file an appeal before the administrative tax court within two months.

Development and news

The applicability of the abovementioned rules to tax claims became uncertain after the publishing of Decree no. 2016-1480 from 2 November 2016. The Decree modified article R421-3 of the Administrative Justice Code (Code de Justice Administrative), extending the two-month appeal deadline to all claims, not only those explicitly rejected. The new rules entered into effect on 1 January 2017.

In spite of this amendment, the fact remains that, according to French law, tax appeals are subject to the specific provisions of the French LPF and not to the provisions of the Code de Justice Administrative. Hence, it became a subject of debate whether the new rules enacted by Decree no. 2016-1480 should be understood as also encompassing tax appeals.

In this sense, the French administrative Supreme Court (Conseil d’État) clarified the issue in its decision from 7 December 2016 in case no. 384.309 - EURL Cortansa. In said decision, the Court confirmed that tax appeals remain subject to the provisions of the LFP and, as such, are not affected by the new rules brought forth by Decree no. 2016-1480.

The way forward

According to the decision of the French administrative Supreme Court, the applicable rules regarding tax reclaims will be the following:

  • The 2-month appeal period only starts when the tax authorities have issued an explicit and argued decision of rejection, which indicates the deadline to appeal the rejection.
  • When the tax authorities have not answered a tax reclaim after a 6-month period, the taxpayer can lodge an appeal before an administrative tribunal, against the tacit rejection, but there is no deadline to file this appeal.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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