COVID-19 Coronavirus: Global Tax Update (France)

France Tax Incentives to Back-up Companies in the Context of the COVID-19 Pandemic

Due to the economic and financial fallouts resulting from the Covid-19 pandemic, France has taken exceptional measures to support companies. In such an outlook, companies would be able to benefit from various favorable steps:

• Tax deferrals on direct taxes installments. Upon request, companies may automatically benefit from a 3-months deferral on the installments of direct taxes due by March 15th by filing a special form. That deferral covers inter alia corporate income tax, the French “Contribution sur la valeur ajoutée – CVAE” or the French “Contribution foncière des entreprises – CFE”. However, please note that VAT payments are out of the scope and still due on a normal course.

• Exceptional reliefs of taxes in case of financial distress. Upon request, companies which justify that they are in financial distress may claim an exceptional tax relief on direct taxes, penalties and late-payment interest. The administration would take into account a wide range of criteria (decrease of sales, net indebtedness, cash and equivalents level, etc.).

• Fast-track procedures of tax credits refunding. The French tax administration is committed to refunding VAT and R&D tax credits faster.

• Potential adjustments of the tax procedures and audits. The government contemplates to postpone filing deadlines, suspend tax audits and reassessments and adapt the statutes of limitation for claims and judicial remedies. An executive order will specify those measures.