French tax administration: the right to make mistakes in tax matters

28 November 2017

The tax bill “Droit à l’erreur” renamed draft law for a State in the service of a trustworthy society was presented to the Council of Ministers this Monday, November 27, 2017. It aims at simplifying and establishing a right to error for everyone, pledge of a change of register in the relationship between the French citizens and their administrations.

Note that the right to error is the possibility for each French to be wrong in his statements for the administration without risking a penalty from the first breach.

Everyone must be able to rectify, spontaneously or during an assessment, when the mistake is made in good faith.

It is based on a good faith a priori: the burden of proof is reversed, it will be up to the administration to demonstrate the bad faith of the user.

The French Minister of Public Accounts and Action introduced the bill, which implements the right to make mistakes, one of President Macron’s campaign commitments.

These tax provisions focus primarily on errors made in good faith in returns, delays or omissions that fall outside its scope.

Thus, in case of erroneous or incomplete declaration:

    • either the taxpayer spontaneously rectifies the error and thus incurs only the interest of delay possibly due reduced by half (remember that its rate should fall to 0,20% per month within the framework of the bill of finance rectified for 2017) ;
    • the administration detects the error during an assessment on documents and the interest of delay possibly due would be reduced by 30% since the taxpayer makes a request for regularization within 30 days following this control;
  • or the administration demonstrates bad faith and late interest will be applied without any reduction.

The following are examples of errors: the omission of a proof, the failure to subscribe to the declaration of result by dematerialized way.

The second part concerns a revival of the relationship of trust between the administration and the company. A company could ask the administration to come and control it on the spot to validate its tax profits, the response of the administration being opposable. Remember that a similar approach was launched in 2013.

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

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