France Administrative Court of Appeal of Nancy Clarifies Taxation of Unpaid Rent Between Related Parties

The French Administrative Court of Appeal of Nancy Nov. 13 issued Decision No. 23NC01249, clarifying the tax treatment of unpaid rent between related parties. The taxpayers, partners in a real estate company, sought to discharge additional income tax and social security contributions. The Administrative Court of Besancon reduced their tax based on a lower rental value but upheld the reintegration of a tenant’s unpaid rent into the tax base as a gift. On appeal, the Administrative Court of Appeal of Nancy found that: 1) the company and tenant had common management and partners, and no rent was required due to ...