When a Canal+ subscription justifies a tax reassessment

A real estate investment company was subject to a tax audit, following whichadministration it had made a villa available to the executive of its holding company.

The executive was therefore subject to a tax assessment for deemed distributed income equal to the amount of rent he allegedly failed to pay.

The reassessment was challenged all the way to the Administrative Court of Appeals.

The court will first rule that, contrary to the plaintiff’s claim, the villa was not used in the course of the company’s business to implement a real estate development strategy. In particular, the court will find that the documents submitted do not establish that business meetings took place at the villa.

It will then examine the evidence to determine whether or not the taxpayer had full use of the villa.

She will note, in particular, that he had taken out a Canal+ subscription using the villa’s address and that the insurance policy listed him as the tenant.

It also rejects the argument that the electricity bills did not prove the taxpayer’s presence, as they reflected “normal consumption, including heating and the operation of video surveillance equipment, the gate, and the pool.” The court finds that the amounts listed on the bills are far too high to correspond solely to the consumption of these devices.

The court therefore ruled that the taxpayer did indeed have full use of the villa and upheld the tax assessment.

CAA Paris, May 28, 2026, No. 25PA00062

This legal watch produced by Mispelon Avocat, a law firm specializing in French tax audit and French tax litigation. You can follow this legal watch subscribing to the newsletter via this link.