Penalty for deliberate breach

In this case, the Court confirmed the application of the 40% penalty provided for by article 1729a of the FTC in case of deliberate breach (formerly “bad faith”), based on (i) the professional real estate manager quality of the applicant company and (ii) the importance of the mistake made (which lasted several months, even after the accountant raised the alert) and represented more than a quarter of the input VAT of the financial year. Consequently, the penalty was applied whilst the applicant company claimed that it had not been subject to any tax reassessment since its creation and had regularized its situation before the audit, a few months after being informed by its accountant of the mistake made.

The Court reiterates, in this case, the Conseil d’Etat case law concerning income tax according to which the FTA must place itself at the time of filing or presentation of the document indicating the elements to be used in order to assess the tax to characterize the breach. It stresses that the mere fact that the taxpayer had corrected the inaccuracies in its declaration before any tax audit cannot prevent the application of the penalty.

Michel Guichard

Michel Guichard, Partner, leads the Indirect Tax activity. With more than 30 years’ experience in International and French Tax law, he advises his clients on indirect tax matters. Michel is […]

Odile Courjon

Odile Courjon, Partner, has developed a strong expertise in indirect tax issues (VAT, wage taxes, excise taxes, export control and customs) in France and overseas. She advises her clients in […]

Bertrand Jeannin

Bertrand Jeannin, Partner, supplies strategic and technical advice to French and foreign multinational groups in all aspects of their VAT and customs policies. Major focuses of Bertrand’s input involve the […]

William Stemmer

William Stemmer, Partner, has more than 15 years’ experience in Indirect Tax matters. William particularly specializes in the real estate and financial sectors. William is a lecturer at the University […]

Nicolas Kazandjian

Barrister registered with the Hauts-de-Seine Bar, he started my career in the indirect tax service line of Deloitte Taj in 1999. My current position is Director. My area of expertise […]

Vanessa Irigoyen

With more than 16 years of experience, Vanessa has extensive expertise in the implementation of international efficiency business models for customs, export control and indirect tax purposes. Her functions notably […]

Anne Gerometta

Anne, Managing Director, has been advising companies on indirect tax issues for more than 17 years. Anne is in charge of the FSI sector (Bank, Insurance, Asset Management) within TAJ […]

Delphine Nicault

Delphine Nicault is an Attorney-at-Law at the French Bar. She joined Deloitte in 2002 and assists her clients on day-to-day VAT issues. She developed an expertise in the VAT and […]