In two separate decisions (no. 1207416, November 29, 2013, and no. 1307130, July 1, 2014, Altran Technologies SA), the Montreuil Administrative Court gave opposite answers to the question of whether or not it is possible for an authorized subcontractor to take into account, in its own CIR tax base, expenses for which the buyer was invoiced but which it had not booked in its accounts.  Although as regards legislation the Court answered that it was not possible, in the first case, given the administrative doctrine applicable at the time of the facts (4 A-1-00 of February 8, 2000), the Court found that the subcontractor could take the expenses into account if the buyer had reached its cap and proven, in affidavits provided to the subcontractor, that such expenses were not included in its CIR.

In spirit at least, this decision appeared logical because, if it had not reached this outcome, the expenses are never taken into account in the CIR although it is undisputed that they are eligible to be.

In the second decision, the same court, for the same company but for a different fiscal year, ruled in the opposite direction, although it ruled that the doctrine cited above was still enforceable and the company had apparently also provided affidavits from the buyers.

In the second decision, it should be noted that the public rapporteur, Mrs. Peton-Philippot, proposed to disregard the 2000 administrative doctrine because legislative changes had occurred in the meantime, but she argued that the doctrine seemed to be substantively quite flexible if the buyers exceeded the cap.

In any event, the tax authorities clarified its doctrine in 2014 (BOFIP, April 4, 2014), expressly mentioning this case, and, as a result, confirmed the position expressed by the tax authorities.

We will have to wait for the Versailles Administrative Court of Appeal's decision regarding this, as the tax authorities have appealed the first decision.

Furthermore, and still within the framework of updating its doctrine (BOFIP, September 5, 2014), the tax authorities have just reported their prior position, which was that tax credits, including the CIR, were to be deducted from corporate income taxes to calculate the special reserve for employees' profit-sharing, thereby taking official notice of the decision by the French Administrative Supreme Court of March 20, 2013, no. 347633, which had ruled that this doctrinal position was illegal.

Henceforth, gross corporate income taxes will have to be taken into account, which reduces the amount of the reserve when companies show a profit for tax purposes.

Remember that the 2013 Amending Finance Act planned provided that the prior doctrine would be applied, but the French Constitutional Court found the act unconstitutional.