Decisions of the Court of Cassation dated February 12, 2025

Yesterday, the Court of Cassation issued two tax rulings concerning (i) the adjustment of penalties in light of the ECHR and the legality of the AMR, and (ii) the special tax on insurance contracts.

(i) In the first judgment, the Court ruled, regarding the application of surcharges for abuse of rights, that the taxpayer’s request for a reduction of the 80% surcharge on the basis of Article 6(1) of the ECHR is admissible. It then notes that the Court, which merely stated that the“tax penalty is proportionate to the conduct,” did not“concretely assess the proportionality of the penalty to the circumstances of the case” and overturns the appellate ruling.

In the same ruling, the court also noted that the AMR, which referred to an initial reassessment proposal rather than the second, identical proposal notified several years later—which led to the issuance of the contested AMR—did in fact enable the company to determine its tax liability. This simple clerical error does not render the AMR invalid.

Court of Cassation, Commercial Division, Feb. 12, 2025, No. 23-14.047, Published

(ii) In the second ruling, it clarifies the condition that the insurer must not collect medical information from the insured in order to apply the reduced 7% rate of the special tax on insurance contracts. The Court upholds the reasoning of the Court of Appeals, which had held thatcontracts “containing exclusions of coverage where the bodily injury covered by the insurance is linked to the insured’s state of health prior to the purchase of the coverage” are not eligible for the reduced rate, since this would require, in the event of a claim, questioning the insured about their prior state of health.

Commercial Court of Cassation, Feb. 12, 2025, No. 23-21.613, Published