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COVID-19 –Tax Law Alert

3/20/2020
In response to the COVID-19 Coronavirus epidemic and its impact on economic activity, the government has put into place immediate support measures for businesses.

You will find below a summary of the key fiscal measures.
 
 
  • Deferral of payment for direct tax installments
Companies (or the chartered accountants who act on their behalf), can ask the business tax services (service des impôts des entreprises) to defer the payment of their next direct tax installments (corporate taxes, payroll taxes, business tax, property taxes), without penalty. 

If they have already paid their March installments, they still have the option of contacting their banks to refuse the SEPA direct debit. 

Alternatively, they can request reimbursement from the business tax services after the direct debit has taken place.

A request form is available on the following page: https://www.impots.gouv.fr/portail/node/9751

Monthly payment contracts for payment of property taxes can be suspended on impots.gouv.fr or by contacting the direct debit services (Centre prélèvement service): the remaining amount will increase the balance payment, without penalty.
 
  • Direct tax discount
Although the deferral of tax deadlines is granted without supporting documentation, requests for tax discount must be justified.

For companies who face difficulties making payments due to the virus, it is possible to request a payment plan from the public accountant (comptable public) in order to spread out or defer the payment of the tax debt.

If the difficulties cannot be resolved by such a plan, in the most difficult situations you can request a discount of direct taxes (e.g. income tax, territorial economic contribution). These measures are granted subject to an individual examination of the request, taking into account the company's situation and financial difficulties.
A request form for the remission is available at the following address: https://www.impots.gouv.fr/portail/node/13465

As things stand, the outcome of these requests remains uncertain and is based on the financial situation of each company
 
  • Extension of corporate tax reporting deadline to 31 May 2020
The deadline for the filing of 2020 company tax returns was set at 20 May.

Following a request made in February 2020 by the governing board of the national order of accountants (Conseil supérieur de l'Ordre des experts-comptables - CSOEC), an exceptional deadline of 31 May 2020 was granted for the filing of tax returns, in a letter sent by the Directorate General of Public Finance received by the CSOEC on 13 March 2020.
 
  • No exceptional measures for VAT or withholding taxes
VAT is a tax collected by companies on behalf of the State and to dateno exceptional measures have been provided for concerning a possible delay in payment or remission of the tax.

The same applies to the obligation for employers to deduct income tax at source on salaries paid. Employers remain subject to this obligation without the possibility of a delay in payment. However, employees can request a modification of their deduction rates under the terms of the regulations currently applicable via the website impots.gouv. In concrete terms, this means being able to prove a reduction in remuneration.
 
  • Deferral of payment of social security contributions payable to URSSAF
Employers can request adeferral of up to three months for all or part of the payment of employee and employer contributions for the 15 March 2020 payment. Employers can adjust their payments according to their needs: amount of 0, or amount corresponding to a part of the contributions. 

For employers who have already filed the nominative social declaration (déclaration sociale nominative - DSN), it was possible to modify the payment until 19 Marchat 12:00 noon. If anemployer pays its contributions without DSN, it can adapt the amount of thebank transfer, or not make a transfer at all.

If an employer does not wish to opt for a deferral of all contributions and prefers to pay the employee contributions, it can stagger the payment of the employer's contributions, as usual.
 
  • Reimbursement of tax credit
In its most recent statements, the tax authorities have announced the possibility of obtaining accelerated or even advance reimbursement of  taxcredit (R&D tax credit). This remains to be confirmed and we are waiting to see the content of the texts or instructions that will be published in this respect.
 
  • Current tax audits
The tax administration indicates that current audits are suspended and that no new audits would be launched.

The forced collection of tax reassessment arising from such audits is expected to be the subject of further developments.
 

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