In a judgment dated 9 June 2022, the Luxembourg Higher Administrative Court (Cour administrative) recalled that for the purposes of computing the three-month statute of limitation applicable in the case of an appeal filed against an administrative decision issued by the Director of the Luxembourg Direct Tax Authorities (“LDTA”) issued under registered mail, the delay shall start as from the third day following that on which the tax Director’s decision was posted. If such day falls on a Saturday, a Sunday or a public holiday, the delay shall be postponed to the next working day.
Facts of the case
In the case at hand, the company AB (the “Company”) failed to submit a tax declaration for the year 2015 (”FY15”). The LDTA therefore issued on 14 February 2018 an ex officio tax assessment pursuant to § 217 of the General Tax Law (the “ex officio tax assessment”).
On 11 May 2018, the Company proceeded, under the same cover, with the filing of (i) its FY15 corporate tax return and (ii) a claim challenging of the FY15 ex officio assessment (the “Claim”). The Claim indicated the name of the same legal entity i.e., Société Coopérative (DE), which has been mentioned as the person or service provider who participated in the drafting of the tax return in the Company’s FY15 corporate tax return. However, the Company’s legal representative mentioned in the FY15 corporate tax return was Mrs.(C) with the indication (FG) apposed under the additional address data section. Additionally, the FY15 corporate tax return was signed by Mrs.(C) and stamped with the mention (C) Manager. On the same date, an additional claim (named ‘Claim filed against the ex officio tax aFssessment issued on 21 February 2018”) was sent to the Director of the LDTA. This additional claim was signed by Mrs.(C) outlining Mrs.(C)’s full name followed by the indication (FG).
Following a request addressed by the Director of the LDTA to Mrs.(C) to justify that the latter was legally authorized to act on behalf of the Company, the Director of the LDTA rejected, in a letter dated 4 September 2019 (the “Directorial Decision”), the Claim on the grounds that such claim was not filed with a power of attorney ad litem issued and signed by the Company’s legal representative fully authorizing Mrs.(C) to bring legal proceedings on behalf of the Company.
On 9 December 2019, the Company brought the matter to the Lower Administrative Court (the ”Administrative Remedy”), which rejected the taxpayer’s claims. In an appeal to the Higher Administrative Court, the Company argued that the Administrative Remedy:
- was, unlike the ruling of the Lower Administrative Court, not time-barred since it had been filed within the legal three-month statute of limitation, and,
- was not lodged by the Société Coopérative (DE), but by the Company itself, filed under the form of the corporate tax return filed for FY15, and signed by Mrs.(C) "in her capacity as legal representative of the managing director" of the Company.
Finding of the Court
First, the Higher Administrative Court reminds that, in accordance with § 228 of the General Tax Law, any directorial decisions may be contested within three months by way of opposition to the Director of the LDTA or his delegate. and confirms that the provisions of § 88 sub-paragraph (3) of the General Tax Law shall apply when a decision from the Director of the LDTA was notified to the taxpayer under registered letter: ”The authority may effect service by registered letter. Service shall be deemed to have been effected on the third day following that on which the document was posted, unless the addressee proves that the document to be served did not reach him within that period". According to the Higher Administrative Court, such paragraph should be read together with the provisions of the European Convention on the calculation of time limits dated 16 May 1996 and 8 of the law dated 7 November 1996 on the organisation of the courts of the judicial order so that if day on which the time limit for appeal expires falls on a non-working day the time limit for appeal is to be reported to the next working day.
In this particular instance, since the Directorial Decision was issued on 4 September 2019, the Administrative Remedy filed on 9 December 2019 was effectively processed within the legal time limit as foreseen under § 228 of the General Tax Law.
Secondly, the Higher Administrative Court finds that § 232 sub-paragraph (1) of the General Tax Law only admits an appeal against a tax assessment imposing a positive obligation to pay a certain tax charge on the taxpayer concerned. As a result, the Higher Administrative Court states that a taxpayer is not entitled by law to lodge an appeal directly against the tax assessment fixing a tax liability equal to zero as, under this particular situation, the taxpayer should not have any legal interest in bringing proceedings (défaut d’intérêt à agir) against such administrative decision. However, the taxpayer is entitled to challenge the amount of the tax losses carry-forward retained upon realisation of a taxable profit in a given financial year and fixing for the first time a tax charge higher than zero. Accordingly, the Higher Administrative Court concluded that the Company had no legal interest in bringing proceedings vis-à-vis the Directorial Decision since the FY15 ex officio tax assessment fixed a nil taxation.