Our customer, a company manufacturing fresh bread and pastries (industrial establishment), recovered over €660,000 in property and CFE taxes after we challenged the application of article 1499-0 A of the CGI following its property leasing transaction.
660 000 €
property and CFE tax refunds
+ 10 years
to secure rental value
The initial challenge: an adjustment in rental value
A company of production of fresh breads and pastries, evaluated as industrial plant, acquired its operating building under a contract of real estate leasing. The tax authorities considered that the acquisition had taken place in 2007, which led to the application of the specific rule of the minimum rental value (or «cost price fixing»), codified in article 1499-0 A of the French General Tax Code (CGI).
This application resulted in the company being taxed at a high level, depriving it of a substantial reduction in its taxable income. tland axis and its business property tax (CFE), and imposing excessive costs.
Our concrete action
We built a legal arguments based on a favorable Conseil d'État jurisprudence. Our strategy was based on a precise time analysis :
We have shown that transfer of ownership should be legally attached to the expiry date of the leasing contract, i.e. in 2006.
At that time, the floor rental value rule (article 1499-0 A of the CGI), introduced by the amended Finance Act for 2008, was not in force. not yet applicable ratione temporis (the text applies only to acquisitions made after December 31, 2006).
Litigation : in collaboration with our partner lawyers, we carried out a litigation before the competent courts, up to and including the highest court, the Council of State, to support this interpretation.
Result: reduced property and CFE taxes
Thanks to this legal victory, the company was able to obtain :
A significant and lasting reduction of its tax base for property tax and CFE.
Tax refunds amounting to more than €660,000 in total.
This decision by the Conseil d'Etat has a major impact, reminding all companies involved in leasing than every calendar detail counts and that a thorough legal analysis can help avoid excessive taxation and generate substantial refunds.
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Has your company recently exercised the option to purchase a property in real estate leasing ? You could be affected by a misapplication of article 1499-0 A of the CGI.
