France: Deferral of direct tax payments for companies, coronavirus (COVID-19) response

France: Deferral of direct tax payments for companies

The French tax authorities announced that companies can postpone, without penalty, the payment of the next installments of direct taxes. The extension does not apply for value added tax (VAT), assimilated taxes or withholdings of employees’ individual income taxes by employers.

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The measure applies automatically, and allows for a deferral of direct taxes for a period of three months. Read a form [PDF 36 KB] that shows the taxes for which the deferral is requested must be indicated on this form.

Companies that have already settled their March installments (in particular, the first corporate income tax installment), there may be the possibility to address the SEPA direct debit with their banks, according to the tax authorities. Alternatively, companies may be able to request a reimbursement (refund) from their tax center once the debit has been processed through their bank accounts.


KPMG observation

The deferral measures only allow for a postponement of the payment of direct taxes, with an aim of enhancing a company’s cash flow. This is not a tax exemption. This relief also does not postpone the return filing deadlines.

In the form, there is a box entitled Factures en attente de paiement de la part de services publics (“unsettled invoices towards public services”) allowing companies to report these receivables to their tax center. This simplified procedure could speed up the reimbursement of VAT or research and development (R&D) tax credits and the payment of debt owed by the state, local authorities and public bodies.


No new tax audits

The French tax authorities have announced that, in general, no new tax audits will be started during the COVID-19 “lockdown period” and that new procedural actions (notifications and assessments) will not be initiated except in specific cases.

For tax audits currently in progress, companies may consider replying that they are not able to respond to the tax authorities’ requests. A bill announced last evening by the French president may include measures relating to procedural arrangements.


For more information, contact a tax professional with KPMG Avocats in France:

Marie-Pierre Hôo | + 33 (0) 1 55 68 49 09 | mhoo@kpmgavocats.fr

Patrick Seroin Joly | + 33 (0) 1 55 68 48 02 | pseroinjoly@kpmgavocats.fr

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