Overseas Chambers of Peter Harris

Overseas Chambers
c/o Addington Chambers
160, Fleet Street,
London EC4A 2DQ,
United Kingdom
https://addingtonchambers.com

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New French "CODE DES RELATIONS ENTRE LE PUBLIC ET L’ADMINISTRATION" : Foreign taxpayers such as trustees take note

January 25th 2016

New French "CODE DES RELATIONS ENTRE LE PUBLIC ET L'ADMINISTRATION" : note the Recours hiérarchique suspending a procedure, and confirmation that a lack of response from the administration within two months can constitute tacit acceptance.

Trustees of foreign trusts with French connections, and their clients might find this of great assistance:

The Code which came into force on 1st January 2016 can be found at this link, pending its publication in Legifrance. One Title comes into force later on 1st June 2016 - 'titre IV du livre II relatives à l'abrogation et au retrait des actes administratifs unilatéraux'.

There are several significant issues in relations with the tax administration which need to be worked through. in particular where there is an absence of response from the tax administration to correspondence, setting out the position as to foreign law within two months, and a deemed acceptance may then be inferred.

In other words, if the administration has not done more than ackowwledge a taxpayer's written statement of their tax position set out in correspondence during a query or investigation which was sent carrying an accusé de réception or acknowledged by the taxpayer, that absence of a response can amount to a tacit acceptance by the administration of the taxpayer's position.  This is important as, whilst the expiration of two months from the accuse de réception implies acceptance, the taxpayer can then also require that the administration confirms its acceptance of the taxpayer's position in writing, if it has not replied.

This is of high importance for decisions involving trusts, and their position under article 792-0 bis I 1., which the administration will as a matter of foreign law, be unable to process quickly in any triangular relationship between a taxpayer their local tax administration and the SIE in Noisy le Grand.

It is worth considering the scope of application of this universal codification of the overall French administration's responsibility, with specific reference to the tax administration itself and to what extent the Tax Code and its regulations and procedures can be distinguished or exempted from the application of general principles of French administrative law or not.

The new Codification of existing law and practice also brings int the light of day an existing relief. The possibility for a form of administrative appeal to the hierarchy of the fonctionnaire concerned, which suspends the implementation of the decision in question during the cnsiderationof that internal appeal.

The Conseil d'Etat has held  that the recours hiérarhique suspends the "mise en recouvrement" of taxation, if lodged in time:

Le recours hiérarchique suspend la mise en recouvrement

La saisine hiérarchique entraine suspension de la mise en recouvrement
Conseil d'État, 8ème / 3ème SSR, 21/10/2015, 369803

The effect is to introduce a possibility to resolve the  issue before taking the matter before  a tribunal. It has to be introduced within the limitation period for such an  appeal and therefore suspends that period until the matter is resolved, it does not exclude a further contentieux:

Article L411-2 du CRPA

Toute décision administrative peut faire l'objet, dans le délai imparti pour l'introduction d'un recours contentieux, d'un recours gracieux ou hiérarchique qui interrompt le cours de ce délai.

Lorsque dans le délai initial du recours contentieux ouvert à l'encontre de la décision, sont exercés contre cette décision un recours gracieux et un recours hiérarchique, le délai du recours contentieux, prorogé par l'exercice de ces recours administratifs, ne recommence à courir à l'égard de la décision initiale que lorsqu'ils ont été l'un et l'autre rejetés.

 

In other words if you use it, you will need to have the paperwork ready to take the matter to the tribunals before the end of the hierarchical appeal process.