Suspension of Collection: Cash Flow Shortages Justify Urgent Action

Within a few days of one another, two administrative appeals courts suspended the collection of taxes and penalties owed by taxpayers pending their rulings on the merits of the cases.

The taxpayers had, in fact, filed motions for a stay of execution with the administrative courts of appeal in order to have the enforceability of their tax debts suspended until the appellate courts issued their rulings.

In the case brought before the Nancy Court, the court will find that“the net available cash, amounting to approximately two million euros as of July 31, 2026, does not […] enable [the taxpayer] to meet cash flow needs of approximately four million euros related, in particular, to short-term obligations facing” the taxpayer.

In the case brought before the Paris Court, the court notes that“the taxadministration t states that the company has a share capital of only 78,829.86 euros, that its long-term debt as of December 31, 2025, amounted to 2,106,027 euros, while its available cash as of September 8, 2026, amounted to 26,441 euros”.

In both cases, the taxpayers’ lack of cash flow thus satisfied the requirement of urgency necessary for the motion for a preliminary injunction to be admissible.

Having found in both cases that there was doubt regarding the legality of the tax assessment, the courts have therefore suspended collection proceedings pending the ruling that will decide the merits of the case.

CAA Nancy, Oct. 8, 2026, No. 26NC02022

CAA Paris, Oct. 13, 2026, No. 26PA05309

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.