French tax audit procedures, penalties, and taxpayer rights (contrôle fiscal).
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General reference only
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Minimum advance notice — Avis de vérification
2 business daysart. L. 47 LPF
FEC delivery deadline after notice
15 daysart. L. 47 A-I LPF
Taxpayer response period to Proposition de rectification
30 days (extendable by 30 days)art. L. 57 LPF
Maximum audit duration for SMEs
3 monthsart. L. 52 LPF
Number of mandatory FEC columns
18 columnsart. L. 47 A-I LPF
FEC field separator
Pipe `|` separatorart. L. 47 A-I LPF
PME reduced rate eligibility — maximum turnover
CA < EUR 10,000,000art. 219-I-b CGI
PME reduced rate eligibility — minimum individual shareholder holding
≥ 75% held by individualsart. 219-I-b CGI
Short financial year reduced-rate profit cap (proration formula)
EUR 42,500 × (days / 365)art. 219-I-b CGI
IS rate used in computation example
25%art. 219-I CGI
Pre-incorporation expenses assumption period
6 monthsart. 39-1-3° CGI
Interest cap on CCA — reference rate
TMPV BCE rateart. 39-1-3° and 212 CGI
Franchise en base threshold — services
EUR 36,800art. 293 B CGI
Franchise en base tolerance threshold — services
EUR 39,100art. 293 B CGI
Capitalisation threshold (SME tolerance)
EUR 500 HTart. 39-1-2° CGI
Standard depreciation method for IT equipment
Linear, 3 yearsart. 39-1-2° CGI
Withholding tax rate on payments to foreign providers (default)
25%art. 182 B CGI
Monthly interest rate (intérêts de retard)
0.20%art. 1727 CGI
Annual interest rate (intérêts de retard)
2.40%art. 1727 CGI
Interest start date
1st day of month following due dateart. 1727 CGI
Interest end date
Last day of month of paymentart. 1727 CGI
Surcharge rate — good faith (material error, first offence)
0%art. 1729 CGI
Surcharge rate — insufficient declaration (bonne foi)
10%art. 1758 A CGI
Surcharge rate — deliberate omission (manquement délibéré)
40%art. 1729 CGI
Surcharge rate — fraudulent schemes (manoeuvres frauduleuses)
80%art. 1729 CGI
Surcharge rate — abuse of law (abus de droit)
80%art. 1729 CGI
Standard reprise period — IS / IR
3 years (until 31 Dec of the 3rd year following the tax year)art. L. 169 LPF
Standard reprise period — TVA
3 yearsart. L. 169 LPF
Standard reprise period — IFI
6 yearsart. L. 169 LPF
Extended reprise period — undisclosed activity / fraud (all taxes)
10 yearsart. L. 169 LPF
Minimum recommended document retention period
6 years (recommended: 10 years)Livre des Procédures Fiscales (LPF)
Late interest rate applicable on voluntary regularisation
0.20% / monthart. 1727 CGI
Surcharge on spontaneous good-faith regularisation before audit
0% (no surcharge)art. 1729 CGI
Default surcharge rate assumed when rate is unclear
10% (good faith)art. 1758 A CGI
BOFiP reference for home office charges
BOI-BIC-CHG-40-20-10BOI-BIC-CHG-40-20-10
BOFiP reference for pre-incorporation expenses
BOI-IS-BASE-30-10BOI-IS-BASE-30-10
Turnover threshold below which lighter verification applies
CA < EUR 50,000Livre des Procédures Fiscales (LPF)
Based on work by Romain Simon (@romainsimon), licensed under MIT. Adapted for the OpenAccountants format.
Disclaimer: This skill is for informational purposes only and does not constitute tax advice. All positions must be reviewed and signed off by a qualified expert-comptable or avocat fiscaliste before filing. Get this reviewed at openaccountants.com.
Quick Reference
| Field | Value |
|---|---|
| Country | France |
| Authority | Direction Générale des Finances Publiques (DGFiP) |
| Scope | Vérification de comptabilité of IS/IR entities |
| Key legislation | Livre des Procédures Fiscales (LPF), CGI |
| FEC obligation | art. L. 47 A-I LPF |
Audit Procedure Phases (art. L. 47 LPF; art. L. 47 A-I LPF; art. L. 13 LPF; art. L. 57 LPF)
| Phase | Legal basis | Description |
|---|---|---|
| 1. Avis de vérification | art. L. 47 LPF | Minimum 2 business days advance notice |
| 2. FEC examination | art. L. 47 A-I LPF | Mandatory delivery within 15 days |
| 3. On-site verification | art. L. 13 LPF | At registered office |
| 4. Proposition de rectification | art. L. 57 LPF | Formal notification of adjustments |
| 5. Taxpayer response | — | 30 days (extendable by 30 days) |
| 6. Inspector's response | — | Confirmation or abandonment of each item |
| 7. Commission départementale | — | In case of persistent disagreement |
| 8. Mise en recouvrement | — | Issuance of amended tax notice |
Taxpayer guarantees (art. L. 47 LPF; LPF; art. L. 52 LPF)
| Right | Source |
|---|---|
| Oral and adversarial debate | art. L. 47 LPF |
| Charte du contribuable vérifié | LPF |
| Hierarchical appeal (interlocuteur départemental) | LPF |
| Departmental tax commission | LPF |
| Maximum audit duration: 3 months for SMEs | art. L. 52 LPF |
Mandatory checks on the FEC file (art. L. 47 A-I LPF)
| Check | Consequence of failure |
|---|---|
| Format conformity (18 columns, pipe `\ | ` separator) |
| Global balance: total debits = total credits | Comptabilité non probante |
| Per-entry balance: each EcritureNum is balanced | Presumption of concealment |
| Sequential numbering (no gaps) | Presumption of concealment |
| Dates within the financial year | Fictitious entries |
| No negative amounts | Format violation |
| PieceRef populated for every entry | Missing supporting documents |
| CompteNum consistent with PCG roots | Irregular accounts |
IS control checkpoints (art. 38–39 CGI)
| Checkpoint | Legal basis | Detail |
|---|---|---|
| IS add-back (account 695) | art. 39-1-4° CGI | IS is not deductible — verify it is added back |
| PME reduced rate eligibility | art. 219-I-b CGI | CA < EUR 10M, capital paid up, ≥75% held by individuals |
| Short year proration | art. 219-I-b CGI | EUR 42,500 × (days / 365) |
| Non-deductible charges | art. 39 CGI | Fines, luxury expenses, personal expenses |
| Acte anormal de gestion | Case law (CE) | Charges unrelated to business interest |
Four cumulative conditions:
Systematic examination grid (art. 39-1 CGI)
| Account | Typical audit question |
|---|---|
| 604 (Subcontracting, APIs) | Exclusively professional use? Invoices in company name? |
| 6132 (Home office) | Justified proportion? Conforming to BOFiP? Convention exists? |
| 6135 (SaaS / hosting) | 100% professional? No personal consumption? |
| 6181 (Documentation) | Link with business activity? |
| 622 (Intermediaries) | Nature and supporting documents? |
| 6231 (Advertising) | Gifts = gratuities? Directories = advertising? |
| 627/6278 (Banking) | Consistent with bank statements? |
| 651 (Domain names) | All related to business activity? |
| 654 (Chargebacks) | Documented irrecoverability? |
High fiscal risk, especially SASU/EURL.
CCA 455 checks (art. 39-1-3° and 212 CGI)
| Check | Detail |
|---|---|
| Pre-incorporation expenses | Assumed within 6 months? Annexed to statuts/PV? Professional character? |
| Home office | Justified surface proportion? Plan available? Non-deductible: mortgage principal |
| Interest on current account | No interest = OK. If interest paid: capped at TMPV BCE rate |
| Currency conversion | BCE rate acceptable; inspector may demand per-transaction rate |
Revenue checks (art. 38-2 CGI)
| Check | Detail |
|---|---|
| Revenue completeness | Cross-check payment platforms (Stripe, PayPal) vs. accounting |
| Period cut-off | Revenue booked only for the financial year |
| Credit balance on 411 (Clients) | Abnormal — advance? Omitted revenue? |
| Asset disposals | Proper classification (account 775)? |
| Commissions / ancillary revenue | Nature? Foreign withholding tax? |
If franchise en base (art. 293 B CGI):
Franchise en base checks (art. 293 B CGI)
| Check | Detail |
|---|---|
| Threshold monitoring | Services: EUR 36,800 (tolerance EUR 39,100). Annualise if short year |
| Invoice mention | "TVA non applicable, art. 293 B du CGI" |
| Asset disposals | Subject to TVA or exempt? |
| Intra-EU / extra-EU services | Autoliquidation (art. 283-2 CGI)? |
If TVA collected:
TVA collected checks
| Check | Detail |
|---|---|
| CA3/CA12 vs accounting concordance | |
| Deductible TVA documentation | |
| Pro-rata deduction if mixed activity |
Fixed assets checks (art. 39-1-2° CGI)
| Check | Detail |
|---|---|
| Capitalisation threshold | EUR 500 HT (SME tolerance). If franchise TVA: TTC amounts |
| Depreciation method | Linear 3 years for IT equipment (standard). Pro-rata temporis from date of commissioning |
| Mixed use | Phone and computer: 100% professional justified? If mixed: only professional portion deductible |
International operations checks (art. 182 B CGI)
| Check | Detail |
|---|---|
| Transfer pricing | Applicable if foreign subsidiary or intra-group transactions |
| Withholding tax (art. 182 B CGI) | Payments to foreign providers: 25% withholding? Check applicable tax treaty |
| DES (Déclaration Européenne de Services) | Required for intra-EU service purchases |
Interest parameters (art. 1727 CGI)
| Parameter | Value |
|---|---|
| Monthly rate | 0.20% |
| Annual rate | 2.40% |
| Start date | 1st day of month following due date |
| End date | Last day of month of payment |
Surcharge schedule (art. 1729 CGI)
| Situation | Rate | Condition |
|---|---|---|
| Good faith | 0% | Material error, first offence |
| Insufficient declaration (bonne foi) | 10% | art. 1758 A CGI |
| Deliberate omission (manquement délibéré) | 40% | Proven intent to evade |
| Fraudulent schemes (manoeuvres frauduleuses) | 80% | Artifice, false documents |
| Abuse of law (abus de droit) | 80% | Artificial arrangements |
Disallowed charges: EUR 10,000
Additional IS (at 25%): EUR 2,500
Late interest (12 months × 0.20%): EUR 60
Surcharge (40%): EUR 1,000
────────────────────────────────────────────────────
Total assessment: EUR 3,560
Aggravating factors
| Factor | Impact |
|---|---|
| SASU/EURL without auditor | Heightened scrutiny on personal charges |
| First financial year | Limited history, frequent errors |
| Revenue in foreign currency | Conversion rate risk |
| High 455 current account balance | Suspicion of patrimony confusion |
| Internet/SaaS activity | Territorial allocation difficulties |
Mitigating factors
| Factor | Impact |
|---|---|
| Small size (CA < EUR 50k) | Lighter verification |
| Regular bookkeeping | Compliant FEC, balanced entries |
| First year in good faith | Tolerance for formal errors |
| No employees | No social risk |
| Franchise en base TVA | No collected-TVA risk |
Assessment: Reintegration of personal portion. Possible requalification as "disguised remuneration" → social contributions. If significant amounts: acte anormal de gestion.
Assessment: Reintegration of excess (declared % − actual %) × charges. Surcharge 10% (good faith) or 40% (if recurring).
Assessment: Full reintegration of pre-incorporation charges. Additional IS on the amount.
Assessment: If inspector considers it undeclared revenue → added to fiscal result + IS + 40% surcharge if intentional.
Assessment: Recalculation of all foreign-currency charges at correct BCE rate. IS on the difference.
Statute of limitations
| Tax | Standard period |
|---|---|
| IS / IR | 3 years (until 31 Dec of the 3rd year following the tax year) |
| TVA | 3 years |
| IFI | 6 years |
| All taxes (undisclosed activity / fraud) | 10 years |
If the taxpayer corrects before an audit:
For each anomaly, the adjustment is formalised as a chef de redressement containing:
Conservative defaults
| Ambiguity | Default |
|---|---|
| Charge deductibility doubtful | Flag as potentially non-deductible |
| Surcharge rate unclear | Assume 10% (good faith) |
| FEC gap found | Flag as potential concealment |
| Revenue source unclear | Include in taxable revenue |
Key legal references
| Rule | Article |
|---|---|
| Taxable profit | art. 38-1 CGI |
| Net asset variation | art. 38-2 CGI |
| Deductible charges (4 conditions) | art. 39-1 CGI |
| IS non-deductible | art. 39-1-4° CGI |
| CCA interest cap | art. 39-1-3° and 212 CGI |
| IS rates | art. 219-I CGI |
| PME reduced rate | art. 219-I-b CGI |
| Franchise en base | art. 293 B CGI |
| Autoliquidation | art. 283-2 CGI |
| Late interest | art. 1727 CGI |
| Surcharges | art. 1729 CGI |
| Good-faith insufficient declaration | art. 1758 A CGI |
| FEC obligation | art. L. 47 A-I LPF |
| Audit notice | art. L. 47 LPF |
| On-site verification | art. L. 13 LPF |
| Rectification notice | art. L. 57 LPF |
| SME audit duration | art. L. 52 LPF |
| Non-probante burden shift | art. L. 192 LPF |
| Standard statute of limitations | art. L. 169 LPF |
| Home office (BOFiP) | BOI-BIC-CHG-40-20-10 |
| Pre-incorporation expenses (BOFiP) | BOI-IS-BASE-30-10 |
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Other France computations in the OpenAccountants Tax Library.
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