The fact that a building remains vacant does not automatically result in a tax reassessment
A Luxembourg-based holding company affiliated with French real estate investment companies (SCIs) that own buildings was subject to a tax audit, following whichadministration issued a tax assessment.
In particular,administration the company for failing to lease out properties owned by the real estate investment companies (SCIs) and considered this to be a waiver of revenue constituting an irregular management act.administration thenadministration the company for the rent that, in their view, should have been collected by the SCIs.
The Administrative Court of Appeal will, however, point out—in the case of a first-time real estate investment company (SCI)—that such a reassessment requiresadministration demonstrate that the property was made available free of charge to a partner in the SCI or to a third party. However,administration asserted that the property had not been rented for 15 years and provided no evidence of any free provision of the building.
The tax assessment against this real estate investment company has been overturned by the court.
With regard to another real estate investment company (SCI),administration noted that a company was using a property rent-free under a lease entered into in May 2012. The Luxembourg holding company had nevertheless submitted a letter stating that it intended to terminate this special lease effective December 6, 2012.administration , however,administration that the premises were still occupied despite this letter because the occupying company had not transferred its registered office until July 30, 2025.
The Court will, however, rule that the minutes of the operating company’s meeting in which it transferred its registered office cannot override the letter submitted by the Luxembourg holding company. The Court therefore finds that the premises were vacant during the 2015 fiscal year, contrary toadministration assessment.
It overturns the tax assessment on this point.
CAA Paris, June 13, 2025, No. 23PA04195
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