TAX NEWSLETTER September 2021

TAX NEWSLETTER September 2021


Depreciation of goodwill: a tax-accounting discrepancy on the depreciation of the goodwill booked by small companies – Decision of the 3rd and 8th chambers of the French Administrative Supreme Court (“CE”) on September 8th 2021, No. 453458, Selarl Pharmacie de Bracieux

The CE considers that the accounting rule authorizing small companies to depreciate their goodwill over 10 years, even though the utilization of this goodwill is not limited in time, is incompatible with tax law.

VAT: the French Tax Authorities (“FTA”) publish their comments on the changes applicable to e-commerce – Public consultation of FTA’ guidelines (BOI)

The FTA launched a public consultation, until October 13th 2021, on their guidelines regarding the new VAT rules applicable to e-commerce transactions for individuals, which apply since July 1st 2021.



Abuse of law: sale of shares at a reduced price and application of the abuse of law procedure – Decision of the commercial chamber of the French Civil Supreme Court on July 7th 2021, No. 589 F-D

The French Civil Supreme Court considers that the sale of shares at a reduced price, constituting a hidden gift, is fictitious. Consequently, the FTA are entitled to apply the abuse of law procedure provided for in Section L. 64 of the French Tax Procedure Code (“LPF”).

“Pandora Papers”: the FTA will prosecute French tax residents in case of tax fraud – Unofficial communication from the French Minister of the Economy, Finance and the Recovery on October 5th 2021

With the “Pandora Papers”, the International Consortium of Investigative Journalists (ICIJ) has unveiled, following the leak of 11.9 million documents providing from 14 financial services companies, a series of financial arrangements including offshore companies. The FTA will investigate the situation of the French tax residents concerned.



Guarantees against changes in the FTA’ guidelines: interpretation by the judge of the FTA’ guidelines referring to Swiss law and Swiss Tax Authorities guidelines – Decision of the 3rd and 8th chambers of the CE on June 25th 2021, No. 442790

In order to determine whether a Swiss taxpayer taxed according to the lump sum Swiss system can claim the benefit of the Franco-Swiss tax treaty in order to be relieved of capital gains tax in France, the CE considers that the FTA must investigate whether this income is excluded from the notion of “privileged income” within the meaning of Swiss law insofar as the FTA’ guidelines explicitly referred to the provisions of Swiss tax law.

Flat-rate taxation of undeclared foreign assets: a Priority Question of Constitutionality (“QPC”) is addressed to the French Constitutional Court (“CC”) – Decision of the commercial, financial and economic chamber of the French Civil Supreme Court on July 7th 2021, No. 683 F-D

The French Civil Supreme Court reverses its decision dated December 19th 2019 (No. 977) and address to the CC the QPC No. 2021-939 concerning the constitutionality of the taxation of undeclared foreign assets at a flat rate of 60% (Section 755 of the French Tax Code) 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.

Capital gain on securities: the capital gain on the sale of securities must include the exchange gain or loss – Decision of the CE on September 13th 2021, No. 443914

The CE rules for the first time on the computation of the net gain from the disposal of securities in foreign currencies and indicates that it is necessary to determine the acquisition and sale prices, by converting them into euros, based on the exchange rates applicable respectively on the date of acquisition and sale.

Belgian tax rulings: Belgian tax rulings constitute state aid – Decision of the Court of Justice of the European Union (“CJEU”) on September 16th 2021, Case C-337/19 P

The CJEU considers that tax exemptions granted by the Belgian tax authorities to multinational companies by way of tax rulings when these entities can claim the existence of a new situation, such as a reorganization leading to the relocation of the main entrepreneur in Belgium, the creation of jobs or investments, constitute state aid.

VAT: the CJEU gives its interpretation of the VAT margin scheme for real estate – Decision of the CJEU on September 30th 2021, Case 299/20

For the CJEU, the margin scheme cannot apply to the sale of land acquired without buildings and resold as building land. However, the division into lots or the development of building land prior to its resale do not prevent this application.



Gifts: opening of online gifts’ registration service – Press release from the Ministry of the Economy, Finance and the Recovery on June 29th 2021, No. 1150

Since June 30th 2021, a new online registration service, available on, is opened to declare gifts and, since September 2021, to pay any relating duties by credit card. This online registration service will be enhanced in January 2022 with the possibility for individuals to declare transfers of shares and rights not evidenced by a deed.

Social levies: the principle of joint taxation of spouses does not apply – Decision of the Administrative Court of Appeal (“CAA”) of Versailles on July 16th 2021, No. 19VE03146

Applying the case law of the CE which provides that income tax rules are not applicable to social levies without an express provision, the CAA of Versailles considers that taxpayers cannot be jointly liable to social levies.