- Tax departments:
- Individual tax departments (SIP);
- Business tax departments (SIE);
- Property tax centers;
- Registration centers;
- Land registry services.
- The activities of the Public Finance Department (DGFIP hereafter) in terms of economic and financial expertise and action:
Thanks to its expertise in financial and accounting matters, the DGFiP provides advisory services in these fields to prefects and local public decision-makers. It also works on behalf of businesses with other local economic players.
The DGFiP’s main missions in the fields of taxation and public management are to assess taxes, control tax returns, identify property assets and keep records of real estate, collect public revenues, control and execute public expenditure, produce budgetary and accounting information, provide financial expertise and consultancy services, manage the Treasury’s cash deposits and steer the State’s real estate strategy. It is also responsible for coordinating and coordinating state pensions.
The DGFiP includes within it the tax legislation department which designs and develops the legislative and regulatory provisions of a tax nature as well as the general instructions necessary for their application. Its mission is also to ensure the conduct of international tax relations (negotiation and interpretation of tax conventions, amicable procedures, transfer pricing taxation, European tax negotiations, work of international organizations).
- Competence of the DGFiP for direct taxes and turnover taxes in matters of income tax:
The departmental commission for direct taxes and turnover taxes intervenes when the disagreement concerns one of the following areas:
- a) the amount of the industrial and commercial, non-commercial, agricultural result or turnover, determined according to a real method of taxation (the commission is therefore competent when the company’s result is in deficit);
- b) the conditions for application of tax exemption or reduction regimes in favor of new businesses, with the exception of the classification of research expenses mentioned in Article 244 quarter B of the General Tax Code:
“Personnel expenses relating to researchers and research technicians directly and exclusively assigned to these operations. When these expenses relate to persons holding a doctorate, within the meaning of Article L. 612-7 of the Education Code, or an equivalent diploma, they are taken into account for double their amount. during the first twenty-four months following their first recruitment provided that the employment contract of these people is of indefinite duration and that the number of salaried research staff of the company is not less than that of the previous year” ;
- c) Application of article 39 of the General Tax Code:
“The net profit is established after deduction of all expenses, these including.”
relating to non-deductible remuneration for the determination of the results of industrial or commercial companies must mention on the statement provided for in Article 54 quater of the General Tax Code:
“Companies are required to provide, in support of the declaration of their results for each financial year, a detailed statement of the categories of expenditure referred to in 5 of Article 39 (1), when they exceed a certain amount fixed by order of the Minister responsible for the economy and finance, as well as the detailed statement of the expenses mentioned in the third paragraph of article 238 A and deducted for the establishment of their tax” .
- d) The market value of buildings, business assets, interests, shares or shares in real estate companies serving as the basis for the value added tax.
- Competence of the DGFiP for direct taxes and turnover taxes in matters of turnover taxes:
The departmental commission for direct taxes and turnover taxes is called upon, in matters of turnover taxes, to give its opinion on disagreements that may arise between the administration and taxable persons regarding increases. relating to the turnover determined according to an actual tax regime or to the market value of goods falling within the scope of real estate VAT.
- a) Turnover determined according to the actual turnover regime
Article L. 59 A of the Book of Tax Procedures provides that any disagreement between the taxpayer and the Administration may be submitted at the request of the taxpayer or on the initiative of the department to the departmental commission under the conditions set by article L. 59 of the Book of Tax Procedures, when it relates to the amount of turnover determined according to the real regime or the simplified real regime.
- Competence of the DGFiP for direct taxes and turnover taxes in matters of local direct taxes:
The departmental commission may be called upon, during the work on the basis of local direct taxes, to participate in the determination:
- a) assessment rates for undeveloped properties;
- b) the rental value of built properties, as well as the periodic updating of rental values.
The tax service harmonizes the assessment elements from municipality to municipality, finalizes them and notifies them to the mayor for display at the town hall within five days.
Within three months following the posting, these elements can be contested both by the mayor, duly authorized by the municipal council, and by the owners and tenants, on the condition that the complainants own or rent more than one tenth of the total number of premises in the municipality or municipal sector concerned, each premises being counted only once.
The dispute is submitted to the departmental commission which makes a final decision.
- Tax prescription:
- The general rules applicable to tax prescription:
In accordance with the provisions of article L.173 of the book of tax procedures, in matters of property tax and housing tax, the deadline for recovery from the tax administration is in principle one year:
“For direct taxes collected for the benefit of local authorities and taxes collected on the same bases for the benefit of various organizations, with the exception of the property tax of businesses, the contribution on the added value of businesses and their additional taxes, the right to resume tax administration is exercised until the end of the year following that for which the tax is due.”
It is thus exercised until the end of the year following that for which the tax is due.
This very short period is explained by the fact that these taxes are not declared by the taxpayer.
Article L.173 of the tax procedures book provides that this period can be extended to 3 years when the taxpayer has been able to benefit from an exemption from these taxes based on his income, and his income tax has been subject to rectification.
That being said, the tax administration’s common law recovery period expires, in matters of income tax and corporate tax, at the end of the third year following that for which the tax is imposed. due.
For example, for income for the year 2022 (declared in spring 2023), the tax administration recovery deadline will expire on December 31, 2025.
The recovery period can however be extended to 10 years (instead of 3 years) in certain special cases.
This is in particular the hypothesis of the exercise by the taxpayer of a hidden activity (that is to say an activity for which the taxpayer has made no tax declaration, and which he has not declared officially).
The tax limitation period also increases to 10 years when the taxpayer has not declared his bank accounts abroad, his life insurance contracts taken out with an organization established abroad, or accounts of digital assets held abroad.
The same applies in particular in the absence of declaration of having held in a trust abroad.
For bank accounts abroad, the recovery period increases to three years if the taxpayer proves that the total credit balances of his accounts abroad did not exceed 50,000 euros at any time during the year. under which this declaration was to be made.
In matters of VAT, the tax administration’s right of recovery runs until the end of the 3rd year following the year in which this tax became payable.
With regard to the CFE (business property tax), the recovery period expires on December 31 of the third year following that for which this tax is due.
This period may exceptionally be extended from 3 years to 10 years in the event that the taxpayer exercises a hidden activity.
However, in accordance with the provisions of articles L.180 and L.186 of the book of tax procedures, in terms of registration fees and IFI (real estate wealth tax), the recovery period runs until December 31 of the third year following that during which these duties and taxes become payable.
This three-year period assumes, in terms of registration and IFIs, that the rights and taxes have been sufficiently disclosed to the tax administration (via a specific act or declaration).
In the absence of a declaration or act presented for the registration formality, the recovery period then increases from 3 years to 6 years from the date of the event giving rise to the tax (for example the death of the taxpayer in matters of inheritance tax, or January 1 of the tax year in matters of IFI).
In all cases, the tax administration must establish the tax, by issuing a roll or a recovery notice, before the recovery period expires.
Note that the above elements concern the tax administration’s right of recovery in terms of basis.
In terms of recovery of the tax itself, public accountants have a period of 4 years, from the day of recovery of the roll (or sending of the notice of recovery) to obtain settlement of the taxpayer’s tax debt.
The limitation period for the recovery action is acquired in the absence of an interrupting act (such as a formal notice to pay the tax) or suspensive act (such as a request for suspension of payment on the taxpayer’s side) within the allotted period.
- Cases of interruption or extension of the tax limitation period:
The tax administration recovery period may be interrupted in certain cases.
In case of interruption At the end of the recovery period, the tax administration then benefits from a new period to collect the rectified duties and taxes.
A proposed rectification may interrupt the tax administration’s recovery period, provided that it is notified before the end of this period.
This notification has the effect of interrupting the limitation period within the limit of the amount of the proposed rectifications (except in the event of possible procedural defects).
The recovery period may also be interrupted in the event of automatic notification of tax bases to the taxpayer concerned.
The limitation period may also be interrupted by declarations or notifications of minutes, as well as by any act which would involve an acknowledgment on the part of the taxpayer of the tax debt (for example a request for payment deadline).
Can also interrupt the limitation period of legal claims, as well as acts of forced execution.
However, the deadline for taking over the tax administration may be extended in the event of a request for international administrative assistance.
In this regard, article L. 188 A of the tax procedures book provides that:
“When the administration has, within the initial recovery period, requested from the competent authority of another State or territory information concerning a taxpayer, it may repair the omissions or tax inadequacies relating to this request, even if the initial recovery period has expired, until the end of the year following that of receipt of the response and, at the latest, until December 31 of the third year following that for which the period initial recovery time has expired.
This article applies to the extent that the taxpayer has been informed of the existence of the request for information within the period of sixty days following its sending as well as of the intervention of the response from the competent authority of the other State or territory within sixty days following its receipt by the administration.”
The limitation period is extended until the end of the year following that of the response from the other State, and at the latest until December 31 of the third year following the initial recovery deadline.
The extension of the recovery period requires compliance with certain conditions, and in particular that the request for international administrative assistance is made within the initial recovery period.
Furthermore, article L.188 B of the tax procedures book provides:
“When the administration has, within the recovery period, filed a complaint leading to the opening of a judicial investigation for tax fraud in the cases referred to in 1° to 5° of II of Article L. 228, omissions or insufficiencies in taxation relating to the period covered by the recovery period may, even if it has expired, be repaired until the end of the year following the decision which puts an end to the procedure and, at the latest, until the end of the tenth year following that for which the tax is due”.
An extension of the recovery period is considered in the event of the opening of a legal investigation for tax fraud. In this case, the limitation period is extended until December 31 of the year following the decision of the Public Prosecutor’s Office, and at the latest until December 31 of the tenth year following that of the imposition.
In addition, article L.187 of the French tax code states:
“When the administration, having discovered that a taxpayer has engaged in fraudulent conduct, has lodged a complaint against him or her, it may carry out checks and make adjustments in respect of the two years exceeding the ordinary limitation period. This extension applies to the perpetrators of the fraud, their accomplices and, where applicable, the persons on whose behalf the fraud was committed.
Pending the decision of the criminal court, and provided that the taxpayer lodges guarantee under the conditions set out in articles L. 277 to L. 280, the collection of taxes corresponding to the period exceeding the ordinary limitation period is suspended. These taxes lapse if the legal proceedings end with a dismissal order or if the persons prosecuted are acquitted”.
The tax authorities are also planning to extend the recovery period if a complaint is lodged for tax fraud.
This is the case when, in the course of a tax audit, the tax authorities discover fraudulent behavior on the part of the taxpayer, leading them to lodge a complaint for tax fraud.
In this case, the tax reassessment period is extended by two years, enabling the tax authorities to issue tax reassessments for the two years preceding the period initially audited.