Earning more money than another taxpayer is not sufficient grounds for a tax reassessment

In 2012, a company, along with two other taxpayers, purchased a real estate complex in the Camargue. The company acquired a building consisting of vacation rentals, a reception hall, and a parking lot. The other taxpayers each purchased a residential home.

The purchase price of the property complex was paid approximately 55% by the company, 20% by the first taxpayer, and 25% by the second taxpayer.

In 2017, the property complex was sold, and the proceeds were allocated as follows: 40% to the company, 40% to the first taxpayer, and 20% to the second.

Following a tax audit of the company and the taxpayers,administration a tax assessment to the company, arguing that the sale price should be allocated in the same manner as the purchase price. According toadministration, by accepting a different allocation, the company would have deliberately reduced its assets, which would constitute an abnormal business decision.

The Administrative Court, to which the case was referred, noted that the company and the taxpayers had commissioned an expert report that was criticized byadministration solelyadministration there had been a change in the allocation between the purchase price and the sale price.

The judges then noted that the mere fact that one taxpayer makes a smaller profit than another does not constitute an abnormal business decision. In this particular case,administration the taxadministration assessmentadministration based solely on this argument, the Court upheld the annulment of the assessment.

CAA Toulouse, April 16, 2026, No. 24TL01411

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