The company SARL Maysam France had acquired an office building. The company argued that it was not be subject to VAT on the rents received in respect of this building in the absence of an express option made for the payment of VAT on the rents.
However, on the statement submitted to the CFE (Centre de Formalité des Entreprises) at the time of the setup of the company, the latter had elected for payment of VAT according to the quarterly regime, that statement mentioned the identification of the building (the sole building rented out) and it was indicated that the election was made, “unless expressly terminated within three months of the start of activity” for a period ending on the 31st of December of the following year. On this basis, the Court ruled that the statement was detailed enough to identify the building covered by the option made and therefore the company had indeed elected to be liable for payment of VAT on the rents in accordance with Article 260, 2° of the French tax Code and was therefore liable to pay VAT. The Court made an application of the “Mercedes” case (Conseil d’Etat, December 23th, 2011, n° 323189) against the applicant.