When the taxpayer's argument falls flat

A restaurant underwent a tax audit during which the tax inspector determined that the accounting records were not conclusive. He then estimated the restaurant’s revenue and profits using the cash method—that is, based on the beverages sold—and subsequently issued a tax assessment to the company operating the restaurant.

In an effort to demonstrate thatadministration could not consider the accounting records to be inconclusive, the company argued, among other things, that the tax inspector had failed to take into account the employees’ consumption of beverages.

The inspector had concluded that staff consumption corresponded to the large bottles purchased by the company that were not available for sale. This amounted to 1 liter or 1.5 liters per person, depending on the year.

The company, however, attempted to argue that this was not sufficient, contending that:

- The employees needed to drink more water "given the environment in which" they worked, namely a kebab restaurant in Paris

- The employees did not drink the bottled water; instead, they poured it into the pitchers served to customers because the tap water tasted bad

The court was not convinced and did not accept the arguments. It therefore upheld the tax assessment against the company that operated the restaurant.

CAA Paris, April 29, 2025, No. 23PA01797

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