[COVID-19] Impact of the confinement measures on tax audits and tax collection

Information current as of the date of publication of this article

France is in a state of health emergency as of 12 March 2020. By a law dated March 23, 2020, Parliament authorized the Government to take a series of measures by means of an ordinance to deal with the consequences of the covid-19 epidemic.

On the basis of this text, the Government issued an ordinance dated March 25, 2020 on the extension of time limits during the period of a state of health emergency and the adaptation of procedures during the same period.

In this ordinance, several measures concern tax audit, tax litigation and tax collection.

The ordinance provides inter alia for:

  • – Suspension, from March 12, 2020 and until the end of the period of health emergency, of the time limits granted to the tax administration to make good of omissions in the tax base, shortcomings, inaccuracies or errors in taxation and to apply default interest and penalties when the statute of limitations expires on December 31, 2020.
  • – For the receivables whose recovery falls on public accountants, the suspension of specified time limits until the end of a period of two months following the end of the health emergency period, which otherwise shall entail nullity, lapsing, foreclosure, prescription, unenforceability or forfeiture of a right or action ongoing on March 12, 2020 or beginning to run during the period of health emergency.

However, to date, the suspension of time limits does not apply to the returns used for taxation, tax assessment basis, liquidation and collection of taxes, duties and fees.

Finally, with regard to ongoing tax audits, the containment measures require the suspension of in situ checks. However, no specific provisions have been adopted concerning documentary checks.