Time limit for bringing an action before the tax judge after an implicit rejection of a claim served to tax authorities: reasonable time limit or endless time limit?
Published on :
18/11/2020
18
November
Nov
11
2020
The French administrative supreme court (Conseil d’État) has just clarified that the rule of reasonable time limit to bring an action before the administrative court does not apply to tax disputes[1].
·Background
A taxpayer had submitted a contentious claim. Tax authorities implicitly rejected that claim (silence of the authorities beyond the six-month period after the submission of the claim).
More than six years after this implicit rejection due to the tax authorities’ silence, the taxpayer filed a petition before the administrative court to challenge this implicit rejection.
The administrative court of Cergy-Pontoise declares this petition inadmissible because of its lateness (complaint lodged beyond a reasonable time limit). The taxpayer lodged an appeal before the administrative court of appeal of Versailles arguing that no appeal deadline was opposable to him because of the lack of express response to his contentious complaint.
The court of appeal considered that this case involved a new question of law and that it was wiser to seek the opinion of the administrative supreme court.
·Underlying issue: articulation between the legal time limit (two months) and the "reasonable time limit" of praetorian origin (one year generally).
In order to understand this issue, two concepts must be clearly figured out: legal time limit to challenge a decision issued by tax authorities and reasonable time limit. The legal time limit applies in the event of express rejection of a complaint (letter notifying this rejection), the reasonable time limit could apply in the event of implicit rejection.
Two-month time limit: this is a time limit provided for by law (article R.199-1 of the tax procedure book). This is the time limit for contesting an explicit rejection of a contentious claim. This time limit, which is two (2) months, may not run until an express rejection decision has been duly notified to the claimant (mentioning the time limits and means to challenge the decision);
Reasonable time limit: it is a decision of the administrative supreme court of 13 July 2016, Czabaj[2] which gave rise to this notion of reasonable time limit. It is generally one year. This time limit may apply when the 2-month time limit does not apply.
As in general litigation in administrative law, the silence kept by the tax authorities after a certain time, after a contentious complaint, is analysed as a rejection of the complaint: it is an implicit rejection (as opposed to an explicit rejection).
In the context of general litigation, the administrative supreme court considered, in the aforementioned Czabaj judgment, that the time limit for acting before the administrative court cannot be indefinite even in the event of an irregular decision of rejection (not mentioning the time limits and remedies), that it is up to the citizen who wants to challenge the legality of an administrative decision to act within a reasonable time. This reasonable period has been estimated to be one year maximum.
In tax litigation, practitioners have questioned the possibility of extending this solution to decisions of implicit rejection.
·Question raised before the supreme court
The question raised before the administrative supreme court was divided into the following alternative:
Should it be considered that the absence of an express decision in tax disputes only prevents the triggering of the two-month time limit and that an implicit decision will not, conversely, prevent the triggering of the reasonable one-year time limit, provided that the claimant is aware of this implicit decision;
Or, on the contrary, should the solution adopted for the two-month period under administrative law be extended to the reasonable time limit and require an explicit decision to be taken in order to trigger the latter period?
In other words, must a taxpayer whose claim has not received an explicit response from the tax authorities within 6 months, which is analysed as a rejection of the claim, be able to challenge the legality of this rejection indefinitely before the tax judge or is his possibility to challenge an implicit rejection limited by a reasonable time limit?
·Answer of the administrative supreme court
The administrative highest court clearly states that the principle of reasonable time limit is not applicable in the event of implicit rejection of a complaint. Taxpayers are not bound by any time limit when they have not received a decision from the tax authorities: "no time limit for appealing against a decision may run against them until they have been duly notified of an express decision rejecting their complaint".
"no time limit may run" means that neither the two-month time limit for filing a claim provided for by law, nor the reasonable one-year time limit (set in the event of rejection of a claim that does not mention the time limits and means of appeal) are applicable to the taxpayer to whom the tax authorities have not deigned to respond.
It is up to the latter, when it wants to avoid being potentially indefinitely caught for claims it has not wished to respond to, to move away from the implicit and, rather, respond in the same way as the claim was presented to it, i.e., by an express decision of rejection.
·Perspectives
For taxpayers who filed a claim more than a year ago and who have still not received an express decision rejecting their claim, the possibility of going to court still remains. The chances of success of an action before the court should be examined and, if necessary, an action can be brought.
Malick DIOUF law firm located at Épône, in the Yvelines department, will assist you in the context of a claim served to tax authorities, or to challenge a decision rejecting the claim (whether the rejection is explicit or implicit), and, in general, in the context of tax audits (ESFP or accounting audit).
·Background
A taxpayer had submitted a contentious claim. Tax authorities implicitly rejected that claim (silence of the authorities beyond the six-month period after the submission of the claim).
More than six years after this implicit rejection due to the tax authorities’ silence, the taxpayer filed a petition before the administrative court to challenge this implicit rejection.
The administrative court of Cergy-Pontoise declares this petition inadmissible because of its lateness (complaint lodged beyond a reasonable time limit). The taxpayer lodged an appeal before the administrative court of appeal of Versailles arguing that no appeal deadline was opposable to him because of the lack of express response to his contentious complaint.
The court of appeal considered that this case involved a new question of law and that it was wiser to seek the opinion of the administrative supreme court.
·Underlying issue: articulation between the legal time limit (two months) and the "reasonable time limit" of praetorian origin (one year generally).
In order to understand this issue, two concepts must be clearly figured out: legal time limit to challenge a decision issued by tax authorities and reasonable time limit. The legal time limit applies in the event of express rejection of a complaint (letter notifying this rejection), the reasonable time limit could apply in the event of implicit rejection.
Two-month time limit: this is a time limit provided for by law (article R.199-1 of the tax procedure book). This is the time limit for contesting an explicit rejection of a contentious claim. This time limit, which is two (2) months, may not run until an express rejection decision has been duly notified to the claimant (mentioning the time limits and means to challenge the decision);
Reasonable time limit: it is a decision of the administrative supreme court of 13 July 2016, Czabaj[2] which gave rise to this notion of reasonable time limit. It is generally one year. This time limit may apply when the 2-month time limit does not apply.
As in general litigation in administrative law, the silence kept by the tax authorities after a certain time, after a contentious complaint, is analysed as a rejection of the complaint: it is an implicit rejection (as opposed to an explicit rejection).
In the context of general litigation, the administrative supreme court considered, in the aforementioned Czabaj judgment, that the time limit for acting before the administrative court cannot be indefinite even in the event of an irregular decision of rejection (not mentioning the time limits and remedies), that it is up to the citizen who wants to challenge the legality of an administrative decision to act within a reasonable time. This reasonable period has been estimated to be one year maximum.
In tax litigation, practitioners have questioned the possibility of extending this solution to decisions of implicit rejection.
·Question raised before the supreme court
The question raised before the administrative supreme court was divided into the following alternative:
Should it be considered that the absence of an express decision in tax disputes only prevents the triggering of the two-month time limit and that an implicit decision will not, conversely, prevent the triggering of the reasonable one-year time limit, provided that the claimant is aware of this implicit decision;
Or, on the contrary, should the solution adopted for the two-month period under administrative law be extended to the reasonable time limit and require an explicit decision to be taken in order to trigger the latter period?
In other words, must a taxpayer whose claim has not received an explicit response from the tax authorities within 6 months, which is analysed as a rejection of the claim, be able to challenge the legality of this rejection indefinitely before the tax judge or is his possibility to challenge an implicit rejection limited by a reasonable time limit?
·Answer of the administrative supreme court
The administrative highest court clearly states that the principle of reasonable time limit is not applicable in the event of implicit rejection of a complaint. Taxpayers are not bound by any time limit when they have not received a decision from the tax authorities: "no time limit for appealing against a decision may run against them until they have been duly notified of an express decision rejecting their complaint".
"no time limit may run" means that neither the two-month time limit for filing a claim provided for by law, nor the reasonable one-year time limit (set in the event of rejection of a claim that does not mention the time limits and means of appeal) are applicable to the taxpayer to whom the tax authorities have not deigned to respond.
It is up to the latter, when it wants to avoid being potentially indefinitely caught for claims it has not wished to respond to, to move away from the implicit and, rather, respond in the same way as the claim was presented to it, i.e., by an express decision of rejection.
·Perspectives
For taxpayers who filed a claim more than a year ago and who have still not received an express decision rejecting their claim, the possibility of going to court still remains. The chances of success of an action before the court should be examined and, if necessary, an action can be brought.
Malick DIOUF law firm located at Épône, in the Yvelines department, will assist you in the context of a claim served to tax authorities, or to challenge a decision rejecting the claim (whether the rejection is explicit or implicit), and, in general, in the context of tax audits (ESFP or accounting audit).
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