France Administrative Supreme Court Issues Decision Clarifying Tax Treatment of Distributed Income, VAT Reminders

The French Administrative Supreme Court Oct. 15 issued Decision No. 496413, clarifying the tax treatment of distributed income and VAT reminders under the General Tax Code and Book of Tax Procedures. The taxpayers, a 50 percent shareholder and managing partner, and his spouse, were assessed additional income tax on income deemed distributed from their company, including VAT reminders. The Paris Administrative Court of Appeal upheld the assessment, treating the VAT reminders as part of the distributed income. On appeal, the Administrative Supreme Court found that: 1) if VAT reminders are deducted under Article L.77 of the Book of Tax Procedures, ...