Tax Assessment: “A clerical error in your favor”

Following a tax audit of a holding company, the French Tax Authority (administration ) determined that the value of a subsidiary’s shares at the time of their contribution to the holding company had been undervalued and issued a tax assessment to the company.

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

The court was then required to rule on the validity of the notice issued by the reassessment proposal.

She will point out that the taxadministration issued an acknowledgment of receipt marked "submitted/notified on May 31, 2021" and that the letter was returned to theadministration fifteen days after that date.

However, the company had filed a complaint with the postal service, which responded that“the substitute mail carrier did not follow the established procedure and did not leave a delivery notice for your package, which was returned to the sender on June 16, 2021.”

The taxadministration did not dispute the probative value of the letter from the Post Office.

The Court therefore finds that theadministration has not provided evidence that the letter containing the reassessment proposal was properly served on the holding company and that the statute of limitations could not have been tolled in a timely manner.

It therefore overturns the tax assessment.

CAA Lyon, Sept. 24, 2026, No. 25LY00910

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.