When a company isn't very strict about the conditions for claiming a VAT deduction

A company whose primary business is the purchase and sale of racehorses was subject to a tax audit, following which the French Tax Administration (administration ) challenged the VAT deduction related to the purchase of a horse and issued a tax assessment to that effect.

administration . believed that the invoice issued by the auction house, which included deductible VAT, had been issued in the name of another U.S. corporation.

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

The court will then rule that the French company could not cite an error in the invoices issued.

She believes that issuing an invoice in the name of the French company more than a year after the sale does not invalidate the first invoice, which was issued to and paid by an American company, especially since this new invoice contains no indication that it may replace the previous one.

It also finds that the French company's accounting treatment of the horse's purchase does not constitute proof that the company purchased the horse directly.

The tax assessment is therefore confirmed.

CAA Paris, June 30, 2026, No. 25PA00254

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.