Selection of administrative court rulings

On August 25 and September 21, 2020, the applicant company filed declarations no. 6660-Rev concerning the commercial premises occupied by companies T..., A..., C... and S... as well as by the association D... The said declarations show that this company declared these premises in the categories of "covered warehouses", "premises used as offices for old fixtures and fittings", "premises used for processing, handling or maintenance", "open-air warehouses and land for commercial or industrial use" and "private schools and institutions operated on a non-profit basis", respectively. It is common ground that, following these declarations, the tax authorities modified the classification of the premises declared by the taxpayer without giving him the opportunity to comment on the proposed modifications. As a result, the claimant is entitled to argue that the tax authorities disregarded their obligations to respect the general principle of the right to a fair hearing.

On September 29, 2015, the applicant company acquired a building for workshop and office use, cadastral code BB 144, located in the "Le Haut Fourneau" industrial zone, with a surface area of 17,000 square meters. The applicant maintains, without being challenged on this point by the Administration, which merely points out that, given the nature of the activity carried out, this is a transfer of an establishment, that the said building is bare premises. Consequently, and insofar as the nature of the activity has no bearing on the application of article 1518 B of the CGI, the company is entitled to argue that the rental value of the building cadastral code BB 144 was wrongly determined in application of article 1518 B of the CGI.

The applicant company maintains that the tax authorities should have applied the smoothing mechanism provided for in article 1518 A sexies of the CGI to the premises formerly referred to as "5002F rue de la Motte", which it has decided to value using the accounting method provided for in article 1499 of the said Code by means of a special roll in application of article 1508. It follows from the investigation that the applicant's real estate complex has been valued as an industrial establishment using the accounting method in accordance with the provisions of article 1499 of the CGI since the company's accounts were audited in 2006, and that the buildings added to the site after this audit were declared as commercial premises, consequently valued using the tariff method. As part of the accounting audit carried out on the company for the period from July 1, 2016 to June 30, 2020, the tax authorities carried out a property valuation of all the buildings making up the site, applying the accounting method set out in article 1499 of the General Tax Code. Contrary to what the tax authorities claim, the change in rental value observed following the audit carried out in 2021 is due to a change in the method used to determine the rental value of the premises added after the audit carried out in 2006, formerly referred to as "5002F rue de la Motte", in application of the provisions of article 1500 of the CGI. Thus, even though it was informed of the industrial nature of its site in 2006, the applicant is entitled to claim that the tax authorities wrongly refused to apply the smoothing mechanism provided for in article 1518 A sexies of the CGI to these premises. As a result, the applicant company is entitled to request a partial discharge of the taxes at issue to the extent of the application of the smoothing mechanism provided for in article 1518 A sexies of the CGI.

The applicant company argues that, while both the premises and the building are located in the immediate vicinity of the 783 departmental road, the proximity of a large Leclerc shopping center makes the premises more commercially attractive than the building, which is located away from any shopping area. However, the building in question is located in an area with other commercial and leisure activities, including a multi-screen cinema, which are likely to attract residents of the Concarneau conurbation. Furthermore, and above all, the applicant company has not produced any evidence to show that the activities likely to be set up in suburban areas comparable to those in which the building in dispute and premises no. 53 are located are dependent on the clientele of neighbouring businesses, whereas, as in the case in point, these are often activities operated by nationally-renowned brands that use advertising to publicize their locations. In addition, the French tax authorities stress, without being contradicted, that the more recent nature of the applicant's building, completed in 2013, would justify the application of a higher weighted rental value per square meter than that of standard premises no. 53, which was built in 1975 and whose design does not meet current construction requirements. In view of the foregoing, the applicant is not entitled to claim the application, on the basis of the provisions of article 324 AA of Appendix III to the CGI, of an allowance of 20 % to the unrevised rental value of its building.

It is clear from the investigation, and in particular from the presentation material that the applicant company publicly distributes, that this company does not simply sell vehicles remotely and store them on the vast outdoor spaces adjoining the premises built on plot ZS 71, but that it offers a wide choice of new and used cars to a public of professionals and private individuals invited to discover, with free access, several hundred models parked on these spaces. Thus, as the Service points out, since the activity carried out within the disputed premises is a car trade, the outside surface cannot be considered as secondary to the activity carried out in the built-up premises, unlike the parking area for customers and employees, which presents a surface with a reduced use value. Consequently, in considering that the 6,355 m² surface area actually constituted a showroom for 369 m² of built premises and an open-air exhibition area of 5,986 m², the entirety of which, without weighting, should be subject to the tariff in force for the MAG5. category, and not for the category of retail premises, and not for the category of open-air storage sites and land for commercial or industrial use (DEP1) or that of open-air parking lots (DEP3), as successively requested by the applicant company in its preliminary claim and then in its petition, the Administration did not misunderstand the application of the provisions of articles 1498 of the CGI and 310 Q and 324 Z of Appendix III to this Code. Moreover, it was right to include the 189 m² surface area of parcel ZS 71 in the external taxable surface area, and to place it in zone Pk2, with a weighting coefficient of 0.2 to take account of the reduced use value of this parking space for customers and employees.

It is clear from the photographs produced by the applicant company that the former Building B was demolished in its entirety in 2020, a fact not disputed by the tax authorities. It must therefore be considered as having been completely demolished on January 1, 2021. Furthermore, while it is undisputed that the restructuring work on Building A and the adjacent buildings was completed in 2022, it is also not clear from the investigation that, as of January 1, 2022, the state of progress of the work on the new building that replaced the old Building B, particularly as regards the shell and network connections, allowed it to be used for industrial or commercial activities, and that this building should therefore be considered as completed. It follows that, for the years 2021 and 2022, this building must be treated as building land liable to property tax on undeveloped property, rather than property tax on developed property. As a result, the property tax on built-up properties, the special equipment tax, the household waste collection tax and the tax on the management of aquatic environments and flood prevention to which the applicant was subject for 2021 and 2022, in respect of the building occupied by the former B building, should be reduced by the difference between these contributions and those that would have applied if it had been subject to the tax on non-built-up properties.