Tax alerts – property tax and CFE

Tax alerts – property tax and CFE

Exemption from property tax and CFE for tools and other installations and material means of an industrial establishment

In its “SA GKN Driveline” decision on December 11th, 2020, the French Administrative Supreme Court (“CE”) reversed its earlier “SAS Les Menuiseries du Centre” decision on September 25th, 2013, No. 357029 relating to the definition of specialised capital goods for the purpose of determining the rental value of properties (used for the basis of real estate property tax and property tax for industrial establishments).


Prior to this recent decision, the French Administrative Supreme Court (“CE”) had reserved the benefit of the property tax exemption and the exclusion from the “Property contribution of companies” (“CFE”) for properties meeting both of the following criteria :

– participate directly in the industrial activity of the establishment ;

– be separable from the properties.


The CE has amended his position by removing the criterion relating to the separability of properties.

From now on, are exempted from property tax, tools, other installations and material means of exploitation of an industrial establishment which are specifically adapted to the activities likely to be carried out in an industrial establishment and which are not amongst the elements mentioned in 1° and 2° of Section 1381. These assets are excluded from the basis of the CFE.


This decision of the CE may be opposed to the French tax authorities in the context of ongoing tax audits. It also opens up the possibility of filing a claim on this issue.

With regard to local taxes, the time limit for taking action runs until 31 December of the year following the assessment of the tax roll. The property tax and the CFE due for the year 2020 will have to be challenged before December 31st, 2021.

If a taxpayer has been the subject of a recovery or reassessment procedure, he has a period of time equal to that of the French tax authorities to file its own claims in application of Section R 196-3 of the French tax proceeding code.


La Tour International remains at your entire disposal to assist you in this procedure. All clam will be subject to a prior investigation of your file.