Decision of the Lyon Administrative Court of Appeal dated December 5, 2024
Last Thursday, the Lyon Administrative Court of Appeal issued an interesting ruling regarding both the deadline for filing a claim (1) and the scope of the procedural irregularity in the absence of a mention of the increase in the tax base under Article 158(7) of the General Tax Code (2).
1/ With regard to the deadline for filing a claim, the CAA specifies that merely referring to the articles setting forth the deadlines for filing claims in a tax bill is tax bill sufficient to inform the taxpayer of the deadlines for appeal. The taxpayer therefore has, to file a claim, the "time limit provided for in Articles R.196-1 or R.196-3 of the Book of Tax Procedures, extended, unless the taxpayer invokes special circumstances, by one year."
2/ With regard to the failure to mention the increase in the tax bases, this renders the reassessment proposal invalid reassessment proposal its entirety; however, this invalidity does not extend to any tax assessments for which the adversarial correction procedure does not apply.
The Court’s reasoning:“While the application of the 1.25 multiplier provided for in Article 158(7) of the General Tax Code—which does not constitute a penalty but necessarily results from these tax base provisions—does not, in the reassessment proposal to a taxpayer, the specific obligation to state reasons required when a penalty is to be imposed; it must nevertheless be included in the reasoning for that proposal in accordance with the requirements of Article L. 57 of the Book of Tax Procedures. The application of the 1.25 multiplier provided for in Article 158(7) of the General Tax Code does not constitute an independent basis for reassessment. The lack of sufficient justification in the reassessment proposal fails to mention the application of the 1.25 multiplier provided for in Article 158(7) of the General Tax Code, therefore affects the validity of the notification of the basis for reassessment as a whole, thereby depriving the taxpayer of the ability to retrace the calculation of the tax base in order to effectively formulate his observations or to make known, in an informed manner, his acceptance of the proposed adjustment. It follows, however, from the provisions of Article L. 55 of the Book of Tax Procedures that the adversarial adjustment procedure provided for therein applies only to cases whereadministration information that the taxpayer is required to report in order to enable the authority to assess the tax."