The Council of State considers that the repayment of RTC’s claim made after the rejection (explicit or implicit) by the Administration of the claim before it, has the character of a litigation relief and therefore gives rise to the right to the payment of default interest.
As part of its 2015 R&D expenses, a company applies for the benefit of the RTC and files the corresponding declarations. In June 2016, it assigned its RTC claim to a banking institution.
On 5th July 2016, the company requested the repayment of its RTC claim. The Administration granted his request by a decision of 13th April 2017 and proceeded to reimburse the bank on 28th April 2017.
The bank unsuccessfully requested that this refund be accompanied by the default interest provided for in Article L. 208 of the book of tax procedures, applicable in the event of tax relief pronounced by a court (or by the Administration, following a claim for compensation for an error in the basis of assessment or calculation of taxes).
The trial judges granted this request. Seized of an appeal brought by the Administration, the Council of State is, in turn, called upon to rule.
The decision of the Council of State
The Council of State points out, in the first place, that the application for reimbursement of a RTC constitutes a contentious claim within the meaning of Article L. 190 of the book of tax procedures (Council of State, 8 November 2010, n°308672, Sity ICBT Madinox).
Thus, a reimbursement granted by the Administration following the admission of such a claim – which tends to obtain the benefit of a right resulting from a legislative or regulatory provision – does not have the character of a relief and does not give rise to the right to the payment by the State of default interest.
On the other hand, if the repayment of RTC’s claim occurs after the explicit or implicit rejection (born of the silence kept by the Administration beyond the 6-month period provided for in Article R. 198-10 of the book of tax procedures) of the application, then this reimbursement would have the character of a litigation relief of the same nature as that pronounced by a court within the meaning of the provisions of Article L. 208 of the book of tax procedures.
It would then give rise to the right to the payment of default interest from the date of the application for reimbursement.
In the present case, the reimbursement was made only after an implicit rejection of the complaint made by its holder (more than 6 months later).
Therefore, the late repayment made is analyzed as a litigation relief giving entitlement to default interest.
It should be noted that several trial courts had already adopted a similar solution (Administrative Court of Appeal of Nantes, 2 July 2020, n°18NT03291, Ass. Esa Group, Administrative Court of Paris, 11 February 2020, n°19PA02181, Sté Highfi C or Administrative Court of Paris, 17 February 2021, n°20PA01309, SAS Laboratoires Delbert).
Such a decision could motivate the tax authorities to accept and reimburse RTC claims within 6 months.
In practice, this is particularly welcome in times of significant cash flow for companies. This decision is applicable for RTC refund claims placed on hold (sometimes for very many months) from the outcome of a tax audit.