Selection of administrative court rulings

For the years 2019 and 2020, the applicant company is subject to property tax on built-up properties in respect of five premises it owned on January 1 of the years in question, comprising a dry port with a surface area of 47,500 m², storage sheds with a total surface area of 12,682 m², a harbor master's office with a surface area of 292 m², a building used as a hotel/restaurant with a surface area of 63 m² and 213 mooring rings. While the applicant maintains that the four business premises other than the mooring rings should have been valued as a single unit in the "SPE2" category, it is clear from the investigation that the multi-purpose nature of these premises meant that they could be used separately and carry out independent activities. Under these conditions, and notwithstanding the fact that they are used for the same marina activity and are located on the same site, sharing the same entrance, the same water and electricity networks, as well as the same equipment, the business premises in question must be considered as constituting fractions of property normally intended for distinct uses. Consequently, the rental value of each of them had to be assessed separately, in accordance with the provisions of article 1494 of the CGI and article 324 A of Appendix III to the said Code.

To contest the French tax authorities' classification of the business as an industrial establishment, the applicant company argues, firstly, that it is not engaged in manufacturing or processing, but merely in the maintenance and repair of motors, pumps and transformers, and, secondly, that the technical resources, materials and tools used in carrying out this activity are not predominant. However, it is clear from the investigation that the activity in question requires the use of significant technical facilities, materials and tools. For example, for motor and pump rewinds, the company has and uses an unwinding oven, two ovens, several winding lathes, a paint booth, a dipping booth, a test bench, a test platform, several overhead travelling cranes and a balancing machine in the workshop. For transformer rewinding, it has a 3.5-ton hoist, an unwinding oven, two ovens, winding lathes and a test platform. For motor and pump repairs, it has several workshop hoists, a forklift truck, a hydraulic press, a paint booth, a test tank for pumps, a stationary and a mobile balancing machine, a test bench and specific tools for each of its technicians. In addition, the applicant uses a number of specific methods and techniques which, according to the data freely available, also require adapted technical resources, such as laser lining and rotating machine diagnostics. Although the company's business does require human resources, it is clear from the investigation that these are limited insofar as the plant employs only two cable workers, three electro-winders, two electro-mechanics and a workshop manager. The predominant role of the equipment used thus confers on the establishment in question an industrial character within the meaning of article 1499 of the CGI. The two circumstances, assuming they are established, that, on the one hand, the gross value of the tooling for the financial years ending in 2015 and 2016 was not preponderant in relation to the value of the staff's remuneration, and, on the other hand, that it would have been noted, at the time of the sale, that the tooling had been used by the company for its own purposes, that, during the 2018 accounting audit, a ratio of gross value of tooling of 15.43 % and 19.34 % respectively was noted, are not such as to call into question the importance of the technical resources deployed and their preponderant role. As a result, the tax authorities were right to consider that the company's fixed assets were of an industrial nature within the meaning of article 1499 of the CGI and to value them using the accounting method.

As a result of the investigation, the department has retained a surface area of 7,309 m² for the main part ("P1"), broken down into a surface area of 2,497 m², which is clearly dedicated to receiving customers and selling vehicles, and two additional surface areas of 795 m², corresponding to a workshop, and 4,017 m², corresponding to a parking area. Although the applicant company claims that the parking area is used solely for vehicle "storage", it does not contest that this uncovered area is open to the public, and therefore provides no evidence to rule out the department's classification of the area as an "outdoor display area for vehicles intended for sale", which is essential to the applicant's main business, and justifies its classification as "P1". In addition, although the company relies on a measurement certificate issued by a surveyor on January 25, 2021, which attests to the presence of two repair shops on that date, one of 589 m² in building 1 and the other of 205 m² in building 2, however, it has not been established that this distribution of the property's premises was the same during the years in dispute between 2017 and 2019, nor that on these dates the part used as a car repair shop was effectively closed to the public, notwithstanding the production of a bailiff's report dated November 24, 2021, which does not provide any clarification on these points. The company therefore provides no evidence to contest the "P1" classification of the 795 m² surface area, nor, consequently, the classification of the building, the main part of which exceeds 2,500 m², in the "Magasins de très grande surface" ("MAG5") category. Finally, contrary to the company's assertion, there is no legislative or regulatory provision to exclude internal traffic lanes or staff parking spaces from the surface areas taken into account when assessing the rental value of the disputed building. The company therefore provides no evidence to contest the respective classification as "P3" and "PK2" of the surfaces corresponding to the roads, for 440 m², and the parking lots, for 560 m².

The revised rental value of the office premises in dispute was calculated on the basis of their classification in category 2 "Office premises with recent fixtures and fittings". The applicant company maintains that, as the premises are located in an old building classified as a historical monument, they should be classified in category 1, despite their renovation, due to the old-fashioned nature of their layout. However, as the applicant itself states, and as is clear from the description appended to the lease, the premises were completely renovated in 2018. The file shows that these renovations concerned the entire building, its shell, partitions, vertical circulation and technical equipment. Since the renovation, the building has been equipped with cabled offices, elevators and insulation. Contrary to what the company maintains, these elements must be taken into account by the Administration in its classification. It follows that the Administration, which took into account the specific nature of these premises, was justified in considering them as falling under the "BUR2" classification. As a result, they were rightly classified as "BUR2", without prejudice to the fact cited by the company that the partitioning remained "traditional" and that there were no office "trays".

It is clear from the investigation, and in particular from the photographs submitted, that the air-cooling and air-treatment electrical systems in the casing area, and the insulating floor in the laboratory, are designed to prevent bacterial contamination and rotting of the products, and to maintain or preserve a good state of preservation of the products when they are canned, and are therefore specifically adapted to the applicant company's agri-food business. As a result, the fixed asset entitled "Rafraîch. air zone emboîtage", which corresponds to a compressed-air air-conditioning textile duct used to ventilate the production area, and the fixed asset "Labo 2-T.S plancher isolant CF+", which corresponds to the cost of flooring the former analysis office, must be excluded from the basis of assessment for property tax on built-up properties.

The applicant company maintains that the weighting coefficient of 1 is incorrect, since the property in question is used exclusively for staff parking, justifying its consideration as a secondary covered area to which a weighting coefficient of 0.5 should be applied. However, it is clear from the investigation that the classification of parking spaces as parking areas means that, according to the price scale established by departmental sector, the property in question is considered to be a primary surface area, as long as there are no secondary surfaces for parking spaces, whether covered or uncovered. The Administration was therefore right to apply a weighting coefficient of 1 to the surface area in question.