Can changing the exercise date constitute an abuse of rights?

A taxpayer, who was the sole partner of an EARL, had entered into an agreement to sell his shares in the EARL to a farmer, on the condition that the latter receive start-up assistance for young farmers.

After receiving the grant, the EARL held a general meeting during which it, among other things, changed the fiscal year-end from the previously scheduled April 30 to December 31.

Following a tax audit,administration that this discrepancy had resulted in the exemption from tax of the income for the fiscal year beginning May 1, 2012, and ending December 31, 2013. This profit had in fact benefited from the 100% tax deduction provided for young farmers. The tax authorities considered that this therefore constituted an abuse of rights.

In particular,administration that the revised closing date of April 30 corresponded tothe"dairy marketing year" and that it had "always been the closing date of the taxpayer's fiscal year."

The Administrative Court of Appeal, which heard the case again after it had been reviewed by the Conseil d'Etat that this time lag was not intended, as the taxpayer had argued, to avoid a proliferation of accounting entries resulting in particular from the requirement that the purchaser obtain start-up assistance for young farmers.

The Court notes that the farm development plan regarding the farmer’s takeover and the application for aid were submitted after the usual deadline.

She also points out that the buyer of the business immediately reinstated the closing date as April 30.

The Court finds thatadministration thusadministration that the delay in the end of the fiscal year was intended solely for tax purposes.

The Court’s ruling is silent on the requirement that the relevant provisions be applied strictly, even though this is necessary to establish an abuse of rights.

One might also question the method used by the Minister to calculate taxes, which is based on a pro rata calculation of the interim results as of December 15, 2013, and which was upheld by the Court. The Court found that the restated financial statements and a certification from the certified public accountant indicating a negative income were not conclusive because the interim result as of December 15 was over €181,000.

CAA Marseille, Jan. 15, 2026, No. 24MA03290

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