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Coronavirus: French tax payments and repayments

The French tax authorities have announced extraordinary measures to defer tax payments, suspend deadlines and accelerate tax rebates in response to the coronavirus pandemic.

Tax deferral

Companies can postpone for three months, without penalty, payment of corporation income tax, payroll taxes, business tax (Contribution sur la Valeur Ajoutée des Entreprises – CVAE) and property taxes.

No conditions need to be satisfied or justification given, other than a request for postponement.  This request must be made using the 'Difficulties related to Coronavirus - Covid 19 Request for payment and/or tax rebate request' form ('Difficultés liées au Coronavirus – Covid 19 Demande de délai de paiement et/ou de remise d’impôt') available on the impots.gouv.fr website.

VAT and similar taxes are excluded from the measure, as is the payment of withholding tax deducted from payments.   

If payments for March have already been arranged, companies can cancel the SEPA direct debit with their online bank, if they still can. If not, companies can request reimbursement of the direct debit corresponding to the March payment.

Companies can request the speeding up of the processing of tax credit refunds such as those relating to VAT, research tax credit (CIR), innovation tax credit (CII) and tax credit for employment and competitiveness (CICE). To request this, companies should use the simplified tax form 'Difficulties related to Coronavirus - Covid 19' form, box 3, mentioning the amount of the debt awaiting payment, the debtor organisation and send it to their corporate tax office, Service des Impôts des Entreprises.

It is possible to obtain early repayment of the overpayment of corporate income tax for 2019, without waiting for early May 2020. Businesses should contact Service des Impôts des Entreprises or, for large companies, the Direction des Grandes Entreprises.

Social contributions

Employers whose URSAFF (Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales) due date falls on the 15th of the month may postpone, without penalty, all or part of the payment of their employee and employer contributions, from 15 March 2020. The date of payment of these contributions may be postponed up to three months.

For employers whose deadline falls on the 5th of the month, information will be communicated to them later, with a view to the deadline of 5 April.

If the employer does not wish to opt for a deferral of all contributions and prefers to pay employee contributions, it can stagger the payment of employer contributions, as usual. To do this, companies should login to their online space on urssaf.fr and report their situation via the messaging system: 'New message / A reporting formality / Report an exceptional situation'. It is also possible to contact URSSAF by phone, dialing 3957.

A postponement or a deadline agreement is also possible for supplementary pension contributions.

Tax rebates

Requests for direct tax rebates must be justified by proper documentation. Rebates can only be granted in the event of serious difficulties that a deferral of payment is not enough to overcome. Rebates will therefore be considered individually after examining the situation of each taxpayer.

This measure concerns the payment of all direct taxes.

The request must be made using the 'Difficulties linked to Coronavirus - Covid 19 Request for payment and / or tax rebate request' form, available on the impots.gouv.fr website. The application must be completed with relevant information and documents needed to assess the economic situation of the requester and the consequences of the health crisis on its tax debt situation.

Measures for the self-employed

Workers can adjust the rate and withholding tax on salaries (Prélèvement à la Source - PAS) at any time. It is also possible to defer the payment of withholding taxes on professional income up to three times each month if the instalments are made on a monthly basis, or from one quarter to the next if the instalments are made on a quarterly basis.   

The measures are accessible via the taxpayer's individual area on impots.gouv.fr under the heading 'Manage my direct debit at source' (Gérer mon Prélèvement à la Source). Any action made before the 22nd of the month will be taken into account for the following month. 

Impact on the accounts closed on 31 December 2019

It is not possible to adjust the accounts closed on 31 December 2019 by taking into account the difficulties linked to the health crisis.

This is because the epidemic and its consequences are events after the end of the 2019 financial year and are therefore not such as to allow the results of the financial year ended 31 December 2019 to be adjusted downwards. Companies must however provide suitable information in the appendix and in their management reports.

Local taxes

An Ordinance allows local authorities to adopt measures derogating from the terms and deadlines for the adoption of decisions relating to rates, tariff and tax basis of local direct taxes.  The deadline for voting on rates and tariff of local taxes has been postponed to 3 July.

This applies to the municipal tax on the final consumption of electricity (Taxe communale sur la consommation finale d'électricité), which had been substantially reformed by the 2020 Finance Act. Most of the changes due to come into force on 1 January 2021 have been delayed to 1 January 2022.

Departments that wish to adopt an individualised rate of land registration tax or of registration fees benefit from an extended deadline of 1 September instead of 1 June to do so.

Time limits

The government has changed the time limits applicable to the processing of applications and demands submitted to the tax administration and has extended the time limits for proceedings before the administrative courts.

All deadlines that expire during the period of the health crisis will be suspended, regardless of the consequences of the failure to comply with the deadline. These measures apply from 12 March 2020 until no more than three months after the end of the health emergency period.

The government has also announced that the tax statutory limitation period (prescription fiscale) will be suspended retrospectively from 12 March until one month after the end of the health emergency. This means that the time granted to the tax administration to correct underpayments of tax paid by companies or individuals, or insufficiencies, inaccuracies or errors in tax returns, for which the deadline is 31 December 2020, will be extended for the duration of the suspension period.

However, for the time being, there is no extension of the deadline for the filing of tax returns.

Measures concerning individuals

Deadlines for filing personal income tax returns have been extended. Those personal income tax returns for which the deadline was initially scheduled on 14 May 2020, must be filed between 4 and 11 June at the latest, depending on the department in which the taxpayer resides.

The e-filing deadline for non-resident taxpayers’ income tax returns has been extended to 4 June.

Measures supported and encouraged by the OECD

The Organisation for Economic Cooperation and Development (OECD) has encouraged the implementation of aid measures to help companies, and therefore national economies, facing the health crisis.

It has published a list of the various measures set up by governments all over the world. While France has already implemented most of the measures suggested by the OECD, it could go even further by implementing more generous measures for the carry-forward of tax losses. The OECD says that one option could be to turn carry-forward tax losses into carry-back tax losses, allowing businesses to receive a one-off cash payment.

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