Case note · CE 13 March 2025 no. 474164 (Klépierre Alpes) — French Tax Code art. 212 & 212 bis

SIIC — Deferred interest & the €3M threshold: scope of the Klépierre Alpes decision

The French Conseil d'État (13 March 2025, no. 474164, Klépierre Alpes) clarifies how the deferred interest mechanism of article 212 II of the French Tax Code interacts with the former €3M threshold of article 212 bis. Key takeaway: deferred interest is allocated to the financial year in which it was initially recorded, not to the year of effective deduction. Although article 212 bis was repealed for financial years opened on or after 1 January 2019 (ATAD transposition), the decision remains relevant for disputes covering earlier years.

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Analysis by François Ouairy · Tax lawyer · Paris · 28 August 2025
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The essentials in 30 seconds

The CE 13 March 2025 no. 474164 Klépierre Alpes decision settles a long-uncertain point of interaction: how deferred interest under article 212 II of the French Tax Code (limitation on interest paid between related parties) interacts with the former regime of article 212 bis of the French Tax Code (general limitation on borrowing costs with a €3M exemption threshold).

Main takeaway: deferred interest is allocated exclusively to the financial year in which it was initially recorded, and not to the year of effective deduction. The €3M threshold is therefore computed year by year, with no artificial aggregation of deferred interest across other financial years.

Although article 212 bis of the French Tax Code was repealed for financial years opened on or after 1 January 2019 (transposition of the ATAD directive, replaced by the new version of article 212 bis, then article 212 ter), the Klépierre Alpes decision remains an essential guide for pending disputes covering earlier financial years (2013-2018), particularly for SIICs (French REITs) and structured property companies.

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Facts, reasoning of the Conseil d'État and legal scope

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1. Facts: the Klépierre Alpes case

A SIIC of the Klépierre group, reassessed on the basis of aggregated deferred interest for financial year 2016.

  • Klépierre Alpes: a company subject to the SIIC regime
  • Reassessment of €766,945 by the tax authorities for financial year 2016
  • Disputed method: the tax authorities aggregated deferred interest from several financial years in order to exceed the €3M threshold of article 212 bis
  • What was at stake: preventing deferred interest from artificially triggering a breach of the SIIC exemption threshold
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2. Reasoning of the Conseil d'État

Strict application of the principle that interest is allocated to its accounting year.

  • Literal quote from the Conseil d'État: "Interest whose deduction has been deferred [...] must be allocated exclusively to the financial year in which it was initially recorded"
  • The €3M threshold is therefore computed year by year
  • No retroactive aggregation of deferred interest onto the year of deduction
  • The tax authorities' method was rejected: the reassessment was annulled
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3. Legal scope

Three main consequences of the decision.

  • Prevents double counting of interest in the event of a tax reassessment
  • Prevents artificial inflation of the SIIC exempt income
  • Prevents excessive distribution obligations under the SIIC regime (which requires distribution of 95% of rental income)
  • Strengthens the traceability of interest flows within financing structures
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4. Residual impact after 2019

Article 212 bis has been repealed, but the decision remains useful.

  • Article 212 bis repealed for financial years opened on or after 1 January 2019 (2019 Finance Act, transposition of ATAD directive 2016/1164)
  • Replaced by a new mechanism (limitation to 30% of tax EBITDA, new wording of article 212 bis of the French Tax Code)
  • Remains relevant for disputes covering financial years 2013-2018, still pending for many SIICs
  • The general principle of allocating deferred interest to its accounting year retains its value under the new regime
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Practical implications for SIICs and structured property companies

Beyond the Klépierre case, several pending files may benefit from this case law.

To be reviewed systematically in pre-2019 SIIC files

SIICs and structured property companies with significant intra-group leverage should re-examine their pending disputes covering financial years 2013-2018. The Klépierre Alpes case law may justify the revision of incorrect reassessments issued by the tax authorities.

Three operational priorities

1 — Review pending SIIC disputes for financial years 2013-2018

Systematic audit of files under dispute: if the tax authorities aggregated deferred interest from several financial years in order to exceed the €3M threshold, the reassessment may be annulled on the basis of Klépierre Alpes. Administrative appeals or litigation should be initiated within the applicable time limits.

2 — Strengthen the accounting traceability of deferred interest

For current financial years (post-2019), the new regime (new version of article 212 bis of the French Tax Code + ATAD) still requires deferred interest to be tracked by year of initial recording. Internal accounting procedures should be updated to ensure traceability by vintage.

3 — Combine this case law with the current SIIC regime

The SIIC regime (French Tax Code art. 208 C) requires the distribution of 95% of rental income and 60% of capital gains. Poor management of deferred interest can artificially inflate these distribution obligations. The Klépierre Alpes case law protects SIICs from this pitfall and should be built into the management strategy for distributable income.

4 — Prepare for future disputes under the new ATAD regime

The new ATAD regime (30% EBITDA limit, €3M floor unchanged) generates its own disputes. The logic of the Klépierre Alpes decision, allocation by year of initial recording, can be transposed. It should be kept in mind for ATAD reassessments covering financial years 2019 onwards.

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Lead counsel — François Ouairy

François Ouairy, partner in charge of the Paris office, advises SIICs, OPPCIs, SCPIs and structured property companies on disputes relating to the limitation of borrowing costs (art. 212 II, former art. 212 bis, new ATAD regime), the review of pending files, and defence before the administrative courts. Listed by Best Lawyers® 2026 in Tax Law and by Leaders League in real-estate taxation.

  • CE 13 March 2025 (Klépierre Alpes)
  • French Tax Code art. 212 II
  • French Tax Code art. 212 bis
  • SIIC regime (art. 208 C)
  • ATAD Directive 2016/1164
  • Best Lawyers® 2026
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Q&A — questions from SIIC tax departments

Does the Klépierre Alpes decision still apply since the repeal of article 212 bis?

Article 212 bis of the French Tax Code was repealed for financial years opened on or after 1 January 2019 (2019 Finance Act, transposition of ATAD directive 2016/1164). For later financial years, the interest limitation regime was overhauled (limit of 30% of tax EBITDA + €3M floor). The Klépierre Alpes decision nevertheless remains relevant: (1) for pending disputes covering financial years 2013-2018, and (2) as a guide to interpreting the principle of allocating deferred interest to its accounting year, a principle that retains its value under the new ATAD regime.

What is the concrete impact on SIIC distribution obligations?

The SIIC regime (French Tax Code art. 208 C) requires the distribution of 95% of exempt rental income and 60% of capital gains. If the tax authorities artificially aggregate deferred interest onto one financial year, they reduce the exempt income and therefore the base of the distribution obligation. Conversely, if they disallow an interest deduction (reassessment), they increase the exempt income and therefore the distribution obligation. The Klépierre Alpes decision protects SIICs from this boomerang effect by securing the allocation of deferred interest to its initial accounting year.

My company is not a SIIC. Does the decision concern me?

Yes. The principle laid down by the Conseil d'État is of general scope and applies to any company with deferred interest under article 212 II of the French Tax Code (limitation on related-party interest) for financial years 2013-2018. Non-SIIC property companies, family holding companies, industrial groups: all may rely on the Klépierre Alpes case law to defend their interest deductions.

Is there a time limit for bringing a claim based on this decision?

For pending disputes, the decision can be invoked directly. For final but recent reassessments (less than 3 years old), a formal tax claim may be filed on the basis of the decision, relying on the general claim period of article R*196-1 of the French Tax Procedure Code (LPF). For older reassessments (more than 3 years old), litigation is in principle no longer available, except in exceptional cases (omission by the tax authorities, manifest error of law). A case-by-case review is essential.

What is the concrete scope of the new post-2019 ATAD regime?

The new regime (new wording of article 212 bis of the French Tax Code) limits the deductibility of net financial expenses to 30% of tax EBITDA, with a minimum floor of €3M (unchanged). Non-deductible interest can be carried forward without time limit, but its offset in a later financial year is subject to the same cap. For SIICs, the ATAD regime combines with the specific distribution obligations, hence the need for an integrated approach to tax management.

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© BENSAID Avocats — The information published on this site does not constitute legal advice. Sources: CE 13 March 2025 no. 474164 (Klépierre Alpes); French Tax Code art. 212 II (limitation on related-party interest); French Tax Code art. 212 bis (former version, general limitation + €3M threshold, repealed as of 1 January 2019); French Tax Code art. 212 bis new wording (post-2019 ATAD regime); French Tax Code art. 208 C and 208 C bis (SIIC regime); EU Directive 2016/1164 (ATAD); 2019 Finance Act (transposition). Editorial update: 28 August 2025.