TLDR: After the end of VAT liability, movable fixed assets and stock withdrawn for personal use are subject to self-supply (LASM) if these goods were eligible for full or partial VAT deduction. Immovable property constituting fixed assets are subject to global adjustments under Article 207 of Annex II to the French Tax Code (CGI). An exception exists for withdrawals made for the normal private needs of the sole proprietor.
General principle of LASM after cessation of activity
The retention of goods by a taxable person or their successors, in the event of the cessation of their taxable economic activity, constitutes a taxable transaction if these goods were eligible for full or partial deduction at the time of their acquisition or allocation. This rule applies to movable fixed assets and stock.
Distinction between movable and immovable property
Movable fixed assets and stock withdrawn upon cessation of activity are subject to LASM, in accordance with point 4° of paragraph 1 of section II of Article 257 of the CGI. On the other hand, for immovable property constituting fixed assets, global adjustments are applied under Article 207 of Annex II to the CGI.
Special cases of stock retained for personal use
If a taxable person retains their stock for personal use after ceasing their activity, this operation is considered a taxable LASM. An exception is provided for withdrawals made for the normal private needs of the sole proprietor, subject to the specific provisions of the CGI.
No adjustment for withdrawn movable property
For movable fixed assets withdrawn upon cessation of activity, there is no need to adjust the previously deducted VAT. Taxation is applied directly under the LASM.
Global adjustments for immovable property
In the event of cessation of activity, immovable property constituting fixed assets are subject to global adjustments, in accordance with section III of Article 207 of Annex II to the CGI. These adjustments aim to correct the initially deducted VAT.
Legal basis and scope of application
LASM is governed by point 4° of paragraph 1 of section II of Article 257 of the CGI, while global adjustments for immovable property fall under Article 207 of Annex II to the CGI. These provisions apply regardless of the business sector, subject to the exceptions provided by law.