• Renting of real estate by a foreign State: French Corporate Income Tax (“CIT”) liability of foreign States renting out real estate in France – Decisions of the 9th and 10th chambers of the French Administrative Supreme Court (“CE”) on January 22nd, 2020, n°421913 and 421914-421915, State of Kuwait

Regarding provisions of Section 206, 1 of the French Tax Code (“FTC”), the CE considers (Decision n°421913) that the lucrative activity of bare renting carried out directly by a foreign State, under conditions similar to those in which private companies carry out their activity, with market prices and a customer base of commercial companies, is liable to CIT.

The CE (Decision n°421914) also judges that income from the bare rental of real estate owned by two French SCIs (not liable to CIT) in which the State of Kuwait holds 99.99% is not liable to CIT if based on the provisions of the aforementioned Section 206. The CE refers the case back to the Court.


• Official delays: the deadlines for direct taxes and the filing of corporate income tax returns are postponed, temporary flexibility for Value Added Tax (“VAT”) – Press release n°1006 of the Ministry of Action and Public Accounts dated April 3rd, 2020 and update of the website “impô” dated April 3rd, 2020

The Minister of Action and Public Accounts announced a delay to May 31st of the deadline for filing the 2019 CIT returns and renewed for April the delay for the tax payment deadlines (i.e. CIT instalments, payroll tax, corporate value added contribution/CVAE and, in the case of monthly payments, property tax and corporate property contribution) and social security contributions. In terms of VAT, companies are temporarily allowed to assess the VAT amounts declared on a flat-rate basis and benefit from more flexible rules for “paper” invoicing with respect to deduction rights.



• Guarantee against change in the guidelines: the comments of the French Tax Authorities (“FTA”) regarding the “tax audit ruling” and the “tax guarantee” are published – BOI-CF-PGR-30-20 of March 4th, 2020 and BOI-CF-PGR-30-25 on March 11th, 2020

The ESSOC Act enforced the guarantee against changes in the FTA’ guidelines by legalizing the “Tax audit ruling” procedure and by setting up a “tax guarantee” under which issues investigated during a tax audit and not reassessed are considered as tacitly confirmed by the FTA. The FTA have just published their guidelines.

• Time-limit for appeal: the two-month time-limit is applicable to appeals for abuse of authority against FTA’ guidelines – Decision of the CE on March 13th, 2020, n°435634, Hasbro European Trading BV

With this decision, the CE puts an end to the ” Association freudienne et autres ” case law and rules that appeals for abuse of authority against FTA’ guidelines are closed within a period of two months.


• French citizens domiciled in Monaco: social security levies on real estate capital gains – Decision of the French Administrative Court of Appeal (“CAA”) of Lyon on January 14th, 2020, n°18LY03360

Capital gains on real estate resulting from the sale of assets located in France by French nationals domiciled in Monaco who are not tax domiciled in France within the meaning of Section 4 B of the FTC are, by application of the provisions of Section 7 of the tax treaty between France and Monaco, taxable for personal income tax purposes in France on the basis of Section150 U of the FTC and not on the basis of Section 244 bis A. These capital gains cannot therefore be subject to social security levies on the basis of Section L. 136-7 of the French Social Security Code.


• Real estate income from United Kingdom (“UK”) sources: comments on the elimination of social security levies in France – Advice from the CE on February 12th, 2020, n°435907

Regarding provisions of Section 24 of the tax treaty between France and UK on June 19th, 2008, the CE considers that the condition that UK-source income received by a French taxpayer must be included in the UK taxable basis to give rise to a tax credit corresponding to the amount of French tax on that income does not apply to French social security levies. Indeed, nothing in Section 24 conditions the tax credit on the fact that income be subject to equivalent or similar levies in the UK.


• VAT: European Union (“EU”) rules governing small businesses are adjusted as from 2025 – EU Directive EU/2020/285 on February 18th, 2020 published in the Official Journal of the EU on March 2nd, 2020

Directive EU/2020/285 on February 18th, 2020, which harmonizes and simplifies the rules for small businesses as from 2025, has been published on March 2nd, 2020. In particular, it specifies that, as from 2025, the maximum level of national exemption thresholds will be redefined and updated and that simplified obligations or exemptions will be provided for.


• Reporting of cross-border tax schemes (DAC 6): the FTA’ guidelines are in public consultation – BOI-CF-CPF-30-40 to BOI-CF-CPF-30-40-20 on March 9th, 2020

As a reminder, the obligation to report comes into force on July 1st, 2020 and goes back to the schemes whose 1st stage was implemented between June 1st, 2018 and July 1st, 2020, to be reported by August 31st, 2020 at the latest. The FTA have posted for public consultation until April 30th, 2020 their first guidelines on the obligation to report potentially aggressive cross-border schemes introduced by the Regulation of October 21st, 2019, which transposes Directive 2018/822 of May 25th, 2018, known as “DAC 6”, into Sections 1649 AD to 1649 AH of the FTC. These comments are enforceable until their possible review at the end of this consultation.



• Official delay: the agenda for filing personal income tax return is adjusted – Press release n°1002 of the Ministry of Action and Public Accounts on March 31st, 2020

In order to respond to the health context, paper tax returns may be filed from April 20th to May 15th, 2020. Online tax returns, which will start on April 20th, 2020, can be filed until June 4th, 2020 for Zone 1 (departments n°01 to 19 and non-residents), June 8th, 2020 for Zone 2 (departments n°20 to 54) and June 11th, 2020 for Zone 3 (departments n°55 to 974/976).