Mergers: the extension of the retroactive effect provided for in the deed is clarified – Decision of the 3rd and 8th chambers of the French Administrative Supreme Court (“CE”) on September 13th, 2021, No. 451564, SAS Adis

The CE considers that pursuant to Section 37 of the French Tax Code (« FTC »), a merger may not enter into force prior to the earliest opening date of the fiscal years in which the merger was definitively concluded between the two companies, but not prior to January 1st of the merger’s year.

Full line of business: the capital gain may be exempted even if there is no employee allocated to the transferred activity – Decision of the Administrative Court of Appeal (“CAA”) of Bordeaux on October 19th, 2021, No. 19BX04882

The CAA considers that the operating conditions specific to the transferred activity must be taken into account while appreciating whether the transferee can carry on an autonomous business. In the case at hand, the CAA rules that the transfer of the customers’ portfolio characterizes a transfer of the key elements as the transferred activity did not require any workforce other than that of the manager.



Inheritance tax return and Dutreil exemption: the French Tax Authorities (“FTA”) benefit from two different time limits – Decision of the Court of Appeal (“CA”) of Paris on October 4th, 2021, No. 20/04393

The CA considers that the FTA have until December 31st of the 3rd year following the filling of the inheritance tax return (and not until the deadline for the inheritance tax payment) to reassess the assets value. However, the FTA have 6 years to audit the Dutreil exemption as researches are necessary to determine whether the company’s activity is commercial or civil, and whether it is a managing (“animatrice”) holding company or not.

Abuse of law: securities contribution performed for a value higher than their market value does not necessarily constitute a gift – Decision of the 3rd and 8th chambers of the CE on October 20th, 2021, No. 445685

The CE rules that the only fact that a contribution of securities is performed for a value that the parties have deliberately increased compared to their market value is not sufficient to characterize the existence of a taxable gift to the transferor based on Section 111, c) of the FTC.

Tax audit: the fine for false invoices complies with the Constitution – Decision of the French Constitutional Court (“CC”) on October 21st, 2021, No. 2021-942 QPC

The CC rules that the fine of 50% of the sums paid or received by the taxpayer in case of false invoices provided for in Section 1737, I-1 of the FTC complies with all constitutional right or principle and is in line with the constitutional objective of preventing tax fraud.



Multinational’s taxation: 136 OECD members states agree with a 15% tax rate – Press release on September 29th, 2021

136 states approved the worldwide agreement providing for a 15% corporate income tax rate to multinational corporations. 4 jurisdictions (Kenya, Nigeria, Pakistan and Sri Lanka) of the OECD/G20 inclusive framework on BEPS have not (yet) signed this agreement.

France-Luxembourg tax treaty: the former tax treaty may be exceptionally applied to some income of France tax residents – Press release of the Ministry for Economy, Finance and Recovery on the website on October 1st, 2021 and update of the FTA guidelines (BOFIP) on October 11th, 2021, BOI-INT-CVB-LUX

French taxpayers receiving Luxembourg source income which were exempted under the former tax treaty of April 1st, 1958 but are, since the entry into force of the treaty of March 20th, 2018, benefitting from a tax credit equal to the French tax, may, exceptionally, request the application of the provisions of the former tax treaty to their 2020 and 2021 income. Taxpayers concerned may amend online their 2020 income tax return until December 15th, 2021.

Tax heavens: three States are released from the European List – Press release of the European Union (“EU”) Council on October 5th, 2021

The EU Council removes Anguilla, Dominica and the Seychelles from its tax heavens’ list, including nine states, and adds them to the list of jurisdictions committed to implementing the principles of proper tax governance.

Foreign UCITS: the FTA publish their comments – Update of the FTA guidelines (BOFIP) on October 6th, 2021

FTA guidelines regarding the exemption of withholding tax applied to income paid to some foreign UCITS are published (BOI-RPPM-RCM-30-30-20-70).

Foreign assets: the flat-rate taxation applied when the assets ‘origin is unjustified complies with the Constitution – Decision of the CC on October 15th, 2021, No. 2021-939 QPC

The CC considers that the taxation of undeclared foreign assets at a flat rate of 60% (Section 755 of the FTC) in case of failure to respond or insufficient response to a request for information or justifications from the FTA based on Section L. 23 C of the LPF complies with the principle of taxpayers’ equality before public charges and respects the Constitution.



Capital gains on real estate: the energetic consumptions confirm the status of main residence – Decisions of the CAA of Versailles on September 28th, 2021, No. 19VE02484 and 19VE02485

The CAA considers that the energetic consumptions are an almost undeniable evidence to establish the main residence of a seller. The CAA specifies that the seller must provide evidence of the date the property was made available for sale and of his own occupation, on that same date, as his usual residence.

Capital gains on securities: a Priority Question of Constitutionality (“QPC”) is addressed to the French Constitutional Court (“CC”) regarding the sale of securities with a seller’s credit – Decision of the 9th and 10th chambers of the CE on October 13th 2021, No. 452773

The CC is questioned about the constitutionality of Section 150-0 A, I of the FTC which provides that taxpayers having sold their securities with a seller’s credit are not allowed to benefit from a tax reduction with respect to the sums received from the purchaser.

Dutreil regime: shares subject to a retention commitment must be included in the computation of the average acquisition price – Decision of the 3rd and 8th chambers of the CE on October 20th, 2021, No. 449292

The CE rules that the average acquisition price to retain for the computation of the capital gain realized on the sale of securities is, pursuant to Section 150-0 D, 3 of the FTC, the average value of all the securities held in full ownership, including those for which a commitment to retain – having no impact on their nature – has been subscribed.