"Is reconsideration of the tax system regarding the payment of cash adjustments justified ?” by Jean-Philippe DELSOL and Laure GAY-BELLILE in a study published in Les Nouvelles Fiscales on 1 June 2017
"The tax authorities’ position of reassessing taxpayers who have benefited from cash adjustment payment seems to us highly questionable when the operation on which the cash adjustment is made is not itself likely to be described as abuse of process " observe Jean-Philippe DELSOL and Laure GAY-BELLILE in a study published in Les Nouvelles Fiscales on 1 June 2017
In a study published in Les Nouvelles Fiscales on 1 June 2017, Jean-Philippe DELSOL, partner in DELSOL Avocats, and Laure GAY-BELLILE, of counsel, give an in-depth analysis of the tax system in relation to cash adjustment payments and the position taken by the tax authorities. After a thorough examination of the current system, its origins and basis, the two specialists analyse and criticize the increasingly frequent use by the tax authorities of the concept of abuse of process for the purpose of challenging the payment of a cash adjustment in relation to capital reorganizations of corporations subject to tax on profits. Although until 1 January 2017 the cash adjustment followed the tax regime whereby tax is suspended or deferred on the main operation provided that it does not represent more than 10% of the nominal value of the securities received, and this without additional conditions, it is clear that the operations relating to contributions or exchanges of securities are now frequently "stigmatized" by the tax authorities on the basis of the abuse of process. Jean-Philippe DELSOL and Laure GAY-BELLILE thus call for a necessary clarification of the rule and jurisprudence in order to "avoid the excesses of a practice of abuse of process which is not intended to allow the tax authorities to change the law but only to prevent any obviously abuse .”