Does the special claim period apply to property tax?

During the Conseil d'Etat's examination of the case on December 18, 2024, the public rapporteur began by pointing out that the general time limit for lodging a claim opened up to the taxpayer by the a of article R.* 196-2 of the Livre des procédures fiscales (LPF) expires, in the case of local direct taxes, on December 31 of the year following that in which the tax assessment was levied. It thus noted that the initial assessment of property tax on built-up properties assigned to the company SVS La Martiniquaise in respect of 2010 having been assessed during 2010, the time limit for lodging a claim under ordinary law therefore expired on December 31, 2011.

Secondly, it noted that the special claim period provided for in article R.* 196-3 of the LPF allows the taxpayer, in accordance with the case law of the Conseil d'Etat, to contest the additional tax corresponding to the rectification to which he has been subject, as well as the initial tax liability for the same tax year and, in the case of local taxation, from the same commune.

It went on to point out that the Paris Administrative Court of Appeal had rejected the application of this rule in accordance with case law. Batipro Company of January 21, 2016 (no. 385 395), according to which the procedure for rectifying omissions or deficiencies in taxation relating to property tax on built-up properties, resulting from the combined application of the provisions of articles L. 175 of the LPF and 1508 of the General Tax Code (CGI), cannot be considered as a procedure for recovery or rectification within the meaning of article R.* 196-3 of the LPF entitling the holder to the special claim period provided for by this article.

It recalled that article L. 175 of the LPF gives the Administration the option of rectifying at any time, without being subject to the ordinary statute of limitations provided for in article L. 173 of the same Book, the omissions and deficiencies resulting from certain failures by the taxpayer to file declarations, and noted that, in this case, there is no opening of a new recovery period in favor of the Administration which would justify the taxpayer benefiting in turn from a new claim period.

It also pointed out that, since the failure to declare can be corrected at any time, the Administration does not need to interrupt the statute of limitations and that, symmetrically, the taxpayer's rights are preserved since he has the possibility of contesting the assessment within the common law time limit set out in article R.* 196-2 of the LPF.

The public rapporteur then noted that in this case, the Administration, which had merely corrected the rental value of the fixed assets included in the basis of assessment for the property tax on built-up properties in the light of the amounts entered in the company's accounts, had not used the procedure provided for in article L. 175 of the LPFThis right is exercised within the time limit provided by article L. 173 of the same Book, and gives rise to the issuance of a supplementary tax assessment.

The public rapporteur thus noted that the solution adopted by the contested judgment was based on an erroneous premiseThis was admitted by the Minister in his written submissions.

The public rapporteur then pointed out that the Minister's defense of the reopening of the time limit was based on a combined reading of the provisions of article L. 173 of the LPF with those of article 1416 of the CGI, the former setting the limit of the Administration's right of recovery at the end of the year following that in respect of which the tax is due, and the latter providing that "... the taxpayer is entitled to recover the tax due from the tax authorities". taxpayers omitted from or under-taxed on the initial roll are entered on a supplementary roll, which may be levied no later than December 31 of the year following that in which the tax was levied. ".

She felt that, like Minister, this original combination cannot fail to have an impact on the application of the special claim period. It pointed out that this time limit had been conceived as a right of retaliation for the taxpayer, intended to place the latter on an equal footing with the Administration in the event of use of its right of reassessment, while the time limit open to the Administration to exercise its rights remains longer than the general time limit for complaint open to the taxpayer.

It then considered that these provisions should be read in conjunction with those of article L. 189 of the LPF, which lists the acts that interrupt the statute of limitations, in particular the rectification proposal, which in principle open up a new period for the Administration, equal to the initial recovery period. In this case, the taxpayer benefits from a special claim period of equivalent length.

The public rapporteur then recalled the terms of the decision SA Marin of October 13, 2000 (n° 189 505), according to which a notification informing the taxpayer of the Administration's intention to subject him to a tax surcharge gives the taxpayer the right to claim against the original assessment until the end of the new recovery period open to the Administration. In order for this new period to run symmetrically in favor of both the Administration and the taxpayer, the notification must be sufficiently reasoned to be considered as an act interrupting the statute of limitations (otherwise, the taxpayer is only authorized to claim within the recovery period initially opened to the Administration by article L. 174 of the LPF).

It added that, in order to give the taxpayer the opportunity to present his or her observations, a letter of this nature must now be sent when, as in the case of business tax, taxation is based on items that must be declared by the taxpayer.

However, she noted that this formality is not always required in property tax matters, as the Conseil d'Etat only requires it when the Administration is basing its decision on failure to comply with a declaratory obligation, which should, in her view, coincide with the scope of application of the special roll procedure provided for in articles L. 175 of the LPF and 1508 of the CGI.

She added that this formality is not normally required. when the Administration exercises its general right of recovery under article L. 173 of the LPF.

The public rapporteur also noted that, in the case in point, the French tax authorities were indeed obliged to send such information. However, she considered that, contrary to the reasoning in the aforementioned judgment SA MarinThis was not because article L. 189 of the LPF would in principle be inapplicable, but rather because in practice, article 1416 of the CGI prevents interruption of the statute of limitations in this case, by requiring the Administration to draw up the supplementary roll no later than December 31 following the tax year, i.e. the same date as that available to the Administration ab initio to exercise its right of recovery under article L. 173 of the LPF. And, insofar as the special claim period is equal to that set for the Administration to establish the tax, it therefore expires on that same date.

While the public rapporteur admitted that the result might seem surprising, since it deprives article R.* 196-3 of the LPF of any useful effect in terms of property and housing taxes, she pointed out that this article can never be used to extend the common law deadline of article R.* 196-2 of the LPF, which expires on December 31 of the year following that in which the tax assessment is made.

She added that, in her view, this means the logical consequence of the principle of symmetry between the rights of the Administration and the taxpayer which follows from article R.* 196-3 of the LPF since, since the Administration does not have the possibility of extending the time limit for recovery by notifying an act interrupting the statute of limitations which is open to it ab initio by article L. 173 of the LPF beyond the deadline set by article 1416 of the CGI, there is no justification for giving the taxpayer a right of retaliation to claim against the original assessment.

It added that when it implements the recovery procedure provided for in article L. 173 of the LPF, in the absence of a challenge to the elements declared by the taxpayer, the Administration is not obliged to send the taxpayer an information letter before levying the tax.

It also considered that the deadline set by article 1416 of the CGI for property and housing taxes is consistent with the idea that local authorities should be able to know as soon as possible the amount of resources at their disposal, an explanation that also applies to the application of the special claim period.

In the end, the public rapporteur proposed that the panel of judges shouldreject the plea of error of law raised by SVS La Martiniquaisehowever, by correcting the grounds for the decision.