Roche & Cie

Delay or absence of tax returns in France: sanctions

15 May 2019

The deadline for reporting non-resident income in France is 2019 to 16/05/2019. After that day, several types of sanctions or penalties may be applied. These sanctions concern the declarations used to calculate the tax (income tax or property tax return, turnover tax return, etc.).

Increases and penalties

Article 1728 of the French General Tax Code specifies that a taxpayer who does not file a return used to calculate the tax within the time limit is liable to a 10% increase on the sums due; the same fate applies if the taxpayer sends his return within thirty days following his formal notice. This increase may be increased to:

  • 40% when, despite the formal notice, the taxpayer has not complied with the thirty-day period following notification of the registered letter.
  • 80% in the event of the discovery of a hidden activity (undeclared activity).

In the event of the discovery of hidden activity, the administration may apply the 80% increase without sending a prior formal notice.

Insufficiency or inaccuracy of information

If at the time of the declaration the taxpayer has omitted certain information from the tax calculation base, the increase may amount to 40%, in case of bad faith on the part of the taxpayer.

When the administration detects fraudulent maneuvers or abuse of right, then the increase will be increased to 80%.

Interest in the event of late payment

In the event of a delay on the part of the taxpayer in paying the tax, the administration may apply tax sanctions. These sanctions consist of a late payment penalty equal to 10%. In the event of bad faith on the part of the debtor, the tax authorities may add default interest equal to 0.2% per month of delay.

The interest on arrears is calculated in principle from the first day of the month following the date on which the tax should have been paid.

For income tax purposes, the starting point is July 1.

Non-taxable

If you are non-taxable, you will not have to pay any surcharges. However, it is imperative that you report your income to obtain a non-taxation notice.

Declaration of succession

In matters of succession, the declaration must be sent to the administration within 6 months of the death.

The absence or delay of declaration is subject to specific rules.

Thus, in the event of good faith on the part of the taxpayer, the default interest amounts to 0.2% per month from the 7th following the death. In case of bad faith, the taxpayer risks default interest of 0.2% plus 40%.

In the event of late payment of inheritance tax, the taxpayer is liable to interest at 0.2% per month.

  • From the 7th month of delay a 5% surcharge will be applied on interest,
  • From the 13th month onwards, the increase amounts to 10%,
  • From the 20th month onwards, the increase amounts to 40%.

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contacts


Cabinet Roche & Cie, English speaking accountant in Lyon, France.
Specialist in Real-Estate and Non-resident taxation.