The Council of State overturns the requirement to disclose the financial implications in the reassessment proposal integrated subsidiary
A subsidiary of an integrated group underwent an audit, following whichadministration notifiedadministration of a reassessment proposal of their intention to reassess its tax liability.
However, this document did not include, as required by Article L.48 of the Code of Tax Procedures, the taxes and penalties resulting from these assessments for the subsidiary.
The Administrative Court of Appeals, to which the case had been referred, had ruled that this irregularity vitiated the proceedings.administration filed an appeal against the ruling.
In a decision dated February 24, the court first noted that, in the event of a reassessment of a consolidated subsidiary, the subsidiary is not liable for the tax. Only the parent company is liable for the tax and "bears the financial consequences of these adjustments."
The Board will then rule that the failure to mention the financial consequences in the reassessment proposal deprive the proposal of its validity and that this cannot result in the cancellation of the tax assessments.
Such a decision can only come as a surprise, since the purpose of notifying taxpayers of the financial consequences is to allow them to decide whether or not to accept the assessment and to submit comments.
However, while Article R 256-1 of the Book of Tax Procedures does provide for the parent company to be informed of the impact of the adjustment on the group’s earnings, the Conseil d'Etat itself Conseil d'Etat ruled that this notification of the financial consequences may be provided on the same day as thetax bill is servedtax bill Council of State, 8th and 3rd Chambers, May 31, 2022, No. 453175, Lebon).
One might wonder, in this situation, how a taxpayer can reasonably submit comments on the amount of the adjustments in a timely manner.
EC, 9th and 10th Chambers, Feb. 24, 2026, No. 495116, Lebon T.
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