France · Court decision
France denies loss carry-back after closure of sole French PE
On 23 October 2026, France’s Conseil d’État held that an Italian company could not carry back the loss for the year in which its sole French permanent establishment closed and all French activity ceased. Continuing business abroad did not preserve eligibility.
- Official document:
- CE509327; CGI220quinquiesI/II; LPFL80A; BOI-IS-DEF-20-10(2012)
- Development date:
- 2026-10-23
Article 220 quinquies of the General Tax Code permits carry-back by election but excludes the year of total business cessation. Irem SpA was taxable in France solely on its establishment’s results; that establishment ceased activity on 31 December 2016.[1]
The court treated closure of the sole establishment and cessation of all French activity as total cessation. It rejected the argument that continuing overseas business made the French closure only partial.[1]
The company relied on paragraph 50 of the litigation’s 2012 administrative guidance concerning elections following tax adjustments. The court held that this procedural provision did not override paragraph 30’s total-cessation exclusion.[1][2]
The court rejected the establishment-freedom discrimination argument because the relevant tax situations were not objectively comparable. Groups should establish the loss year, remaining French activities and French tax status. The judgment creates no new filing deadline or automatic refund entitlement.[1][2]
Official sources
- [1] Conseil d’État decision509327
Conseil d’État · Document date: 2026-10-23
Worker whole109lines; rootordinaryHTTP ownreasoningparas2–9read afterwebtimeout. Para2reproduces litigationCGI220quinquiesI/II;para5LPFL80A;paras3–8cessation/guidance/comparability. 2016case, not independentwholecurrent2026CGIreview.
- [2] Historical BOI-IS-DEF-20-10
DGFiP · Document date: 2012-09-12
Root/worker paragraphs30/50read,73–79/93–97. Historicalguidance publicationended2February2022; this is litigation’s2012version, not current2026guidance.