By Pascal Luquet & Mickaël Duquenne, Grant Thornton Société d’Avocats, Neuilly-sur-Seine, France.
For several weeks, France’s economic life will be affected by the exceptional situation we are facing due to the coronavirus epidemic. All aspects of economic and business life are affected, particularly taxation.
The French General Directorate of Public Finance business continuity plan, released recently, provides emergency social and tax measures and announces changes to the daily activities of tax officers, particularly for tax audits.
The General Director of Taxes has confirmed that tax audits are not, for the time being, a priority mission for tax agents.
As a reminder, 54,000 tax audits took place in France in 2019 (+8% compared to 2018), generating EUR 9 billion of taxes (+16.3%) after several years of decline. According to our information and as a result of France’s continuity plan, until further notice, the French National Directorate of Tax Investigations will not carry out any new on-site inspections or personal tax examinations except in exceptional cases. No visits or tax raids procedures will be carried out either.
For ongoing audits, all non-urgent operations are deferred unless the taxpayer expressly wishes to continue the audit under conditions that do not risk the auditor’s health.
As on-site interventions are prohibited, remote work is possible according to methods to be defined in agreement with the taxpayer. A record of this agreement must be retained, and the date and time of any telephone appointment must allow for the taxpayer to be assisted by counsel.
If a company can reply, in particular concerning correspondence that would normally be addressed with acknowledgment of receipt, an audit could proceed by e-mail. The time limits for reply must take into account the current situation and the company’s capacities.
The sending of proposals of reassessments are be deferred, except in cases where the law defines an imperative deadline.
The same would apply to cash collections of taxes and penalties. A legal text to freeze the consequences of failure to comply with deadlines in the various procedures will be proposed very quickly.
However, the French General Directorate of Public Finance recommends that its auditors complete, as quickly as possible, those audits that are almost complete and that do not pose any major problems (compliant or low-yield cases, regularization pursuant to Article L62 of the LPF with payment deadlines, etc.).
As the business continuity plan is updated in line with current developments relating to COVID-19, these measures are subject to change. We will keep you informed of any changes.
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