Decisions of the Council of State dated November 14, 2025

Last Friday, the Conseil d'Etat several rulings regarding:

- the order in which deficits are offset. The Conseil d'Etat that "deficits carried forward to subsequent fiscal years are offset against profits in chronological order, beginning with the oldest deficit or remaining deficit, as soon as the results of one of those fiscal years show a profit" (Council of State, 9th and 10th Chambers, Nov. 14, 2025, No. 493824, Lebon)

- VAT paid by a future partner of a company in connection with transactions prior to the company’s incorporation. Only the company that paid the VAT—that is, the future partner—is entitled to deduct it. The company formed subsequently is not entitled to deduct it (CE, 9th and 10th Ch., Nov. 14, 2025, No. 490867, Lebon T.)

- The time limits for bringing VAT-related actions before the courts when, following a request for a VAT credit refund, a reassessment proposal into question the existence of that credit (Council of State, 9th and 10th Chambers, Nov. 14, 2025, No. 498880, Lebon T.)

- The criteria for determining the existence of a de facto partnership and the assessment of the micro-enterprise threshold for a furnished rental business operated by co-owners with undivided ownership (CE, 9th and 10th Chambers, Nov. 14, 2025, No. 495516, Lebon T.)

- Classification of income received by an executive as unjustified mileage allowance payments (CE, paras. 9 and 10, Nov. 14, 2025, No. 497065, unpublished)

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