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Covid 19 – Tax measures as at March 16, 2020

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Further to the announcements by the French President on March 12, the French Ministry of Finances has adopted extraordinary measures to support enterprises in France from a tax standpoint: deferred payment of certain taxes and, in the most difficult cases, direct taxes’ cuts.

Below is an overview of the available information as of to-date:

1.   Deferred payment

1.1    For businesses

Enterprises (or their accountants as the case may be) can request from their business tax service (so-called ”SIE”) a free deferral[1] of payment of their next direct taxes’ instalments, i.e.:

  • Corporate income tax (in French «IS ») and associated tax  contribution sociale sur l’IS ») instalment, due in principle via e-filing by March 15 (i.e., March 16 in practice this year) – “relevé d’acompte n° 2571” form;

 

  • Tax on wages, due in principle via e-filing by March 15 (i.e., March 16 in practice this year) with respect to the wages paid in February (for taxpayers taxed on a monthly basis) – “relevé de versement provisionnel n° 2501”

Such taxes will be deferred by 3 months, upon request, without any justification. The form to be filed is available at:

https://www.impots.gouv.fr/portail/files/media/1_metier/2_professionnel/EV/4_difficultes/440_situation_difficile/formulaire_fiscal_simplifie_delai_ou_remise_coronavirus.pdf

If the March instalment has already been paid, the enterprise can maybe oppose to the SEPA debits by contacting their banks. Otherwise, they can also claim for the refund of the taxes paid to their SIE, once the payment has been made.

Conversely, no deferral (or rebate) is allowed for now with respect to VAT and assimilated taxes, to the PAYE execution and to the tax on insurance contracts (so-called “TSCA”).

 

1.2    For the monthly payment of certain local taxes

Enterprises can suspend the monthly payment of certain local taxes (i.e., the « CFE » and the « taxe foncière »). To that end, they can either use their personal access or contact the collection centre (« Centre prélèvement service »). The deferred taxes will be paid together with the balance, without any penalty.

 

1.3    For self-employed workers

The rate and the instalment of PAYE (so-called « PAS » in France) can be adjusted at any time.

Self-employed workers are also allowed to postpone the payment of the PAS instalment on their professional income from one month to the next one, up to 3 times if their instalments are on a monthly basis, or on a quarter-over-quarter basis if their instalments are on a quarter basis.

From a practical standpoint, these adjustments can be done via their personal access (“Gérer mon prélèvement à la source »). Any change prior to the 22nd of each month shall be effective as from the next month.

 

2.  Rebate on direct taxes, late interest or penalties

A claim for rebate can be introduced with respect to IS and certain local taxes (CFE and CVAE). Such measure does not expand to VAT and assimilated taxes, PAYE execution and TSCA.

Such claim must be motivated: the taxpayer must demonstrate that the payment is impossible, by providing the information listed by the French tax administration in their form (see above link), as well as any other element justifying a deferral of payment or a rebate.

The request will be subject to a specific review by the French tax administration.

 

3.   Other unchanged tax deadlines

All other tax formalities and deadlines remain unchanged for-now, in particular:

  • The deadline for filing the CIT returns for enterprises whose FY closed on December 31, 2019 is still May 3 (postponed to May 18 in principle in case of e-filing);

 

The deadline remains April 30 for enterprises having closed on January 31, 2020.

 


[1]
I.e., the 5% penalty for late payment and the interest for late payment at a rate of 0.2% per month will not apply.

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