In this case, the Court confirmed the application of the 40% penalty provided for by article 1729a of the FTC in case of deliberate breach (formerly “bad faith”), based on (i) the professional real estate manager quality of the applicant company and (ii) the importance of the mistake made (which lasted several months, even after the accountant raised the alert) and represented more than a quarter of the input VAT of the financial year. Consequently, the penalty was applied whilst the applicant company claimed that it had not been subject to any tax reassessment since its creation and had regularized its situation before the audit, a few months after being informed by its accountant of the mistake made.
The Court reiterates, in this case, the Conseil d’Etat case law concerning income tax according to which the FTA must place itself at the time of filing or presentation of the document indicating the elements to be used in order to assess the tax to characterize the breach. It stresses that the mere fact that the taxpayer had corrected the inaccuracies in its declaration before any tax audit cannot prevent the application of the penalty.