The purchase of a demand deposit account receivable at its face value does not constitute an irregular act of management

An SAS acquired, at face value, the receivable corresponding to the shareholder’s current account held by two individuals in an SARL. To finance this acquisition, it took out a bank loan.

Following a tax audit,administration challenged the deduction of interest on this bank loan.

She believed that purchasing the debt at face value constituted an irregular act of management because the debt’s actual value was significantly lower than its face value.

administration assessing the claim,administration relied on:

• the fact that the company has been operating at a loss since its incorporation

• a negative gross surplus in the two fiscal years preceding the purchase of the receivable

• negative cash flow margins

• the absence of dividends and management compensation

It also determined the company's share capital.

The Administrative Court of Appeals will, however, note that in order to challenge the face value used,administration demonstrate that the assigned claim was uncollectible.

According to the Court, the LLC’s ability to repay the debt should have been determined “based on the repayment period, the company’s financial health and growth prospects, and the ratio of revenue to debt.”

It will then conclude that the LLC’s assets were indeed sufficient to repay the debt.

The Court will also note that the purchase of the debt was also in the SAS’s interest, as it subsequently enabled it to take control of the SARL.

The tax assessment is therefore rescinded.

CAA Nantes, Oct. 21, 2025, No. 25NT00179

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