The value added tax which has

This decision provides important insight into your property rights. Here is what it changes for you.

The situation

The value added tax which has burdened the acquisition of a property is regarded as deductible as long as that property remains, during the five-year period set out in Article 257 7° of the General Tax Code, intended for sale. The property unsold at the expiry of that period, changing its purpose, falls outside the scope of that article. In the absence of a repayment of the VAT, it is due on a self-supply of the property remaining in stock, pursuant to the provisions of Article 258 8° 1 of the same code. Thus, the Court of Appeal, which after finding that certain assets acquired by a company were not resold within the five-year period, during which insolvency proceedings were opened, and that the tax authorities notified a VAT assessment on the self-supply of the properties remaining in stock, held the tax claim extinguished for failure to file a claim, infringed Articles L. 621-32 and L. 621-43 of the Commercial Code in their version prior to the Law of 26 July 2005 on business rescue, together with Articles 257 7° and 257 8° 1 c of the General Tax Code, whereas the chargeable event for that claim was the expiry of the five-year period, so that the claim, which did not arise prior to the opening of the insolvency proceedings, did not have to be the subject of a filing.

What the law says

This decision confirms the fundamental principles of property law.

Key takeaways

• Scrupulously comply with legal deadlines for appeals
• Keep all your supporting documents (deeds, documents, correspondence)
• Anticipate: preventive advice always costs less than a dispute

For an analysis of your situation: 30-minute consultation at €45 with Maître Zakine.