The taxable period is the fiscal year, which corresponds generally to the calendar year. For periodic activity, the fiscal year could be different from the calendar year.
Companies are required to file an annual tax return before 30 April of the following year (for the FY19 annual tax return and as a result of the COVID-19 crisis, the deadline has been postponed to 31 May 2020 for companies under the large companies directorate (DGE) and to 30 June 2020 for the rest of the companies) together with a detailed statement of proceeds paid to third parties with respect to subcontracted services, hiring of personnel and equipment, leases, and technical assistance services, as well as transfer pricing documentation. Monthly tax returns, which include VAT, IBS instalments, WHTs, PIT, and payroll taxes, should be filed within 20 days of the following month.
Payment of tax
IBS is paid before May 20 and after the tax return is submitted after offsetting the corporate income instalments already paid before the IBS liquidation. Three IBS instalments are due on 20 March, 20 June, and 20 November, each equal to 30% of the IBS of the previous year.
Tax audit process
As a general rule, the tax administration informs the company when a tax audit has to be performed. The tax audit notification indicates the audited taxes (in all cases: IBS/TAP/VAT) and the concerned period. The company can be assisted by an expert, and it can ask the tax administration about several issues subject to audit. The tax audit is concluded by sending a final tax reassessment notification.
Some discounts or moderations can be granted to a debtor that is usually punctual in meeting its tax obligations and honouring its debts. For this purpose, taxpayers may, if indigent or hinders introduce a release request to the tax administration, seek remission or moderation of direct taxes properly established. A payment schedule may be granted to a company or to an individual in order to honour, progressively, their liabilities.
Taxpayers may also apply for some reconsideration by the tax administration. The following alternatives are available:
- Applications for reconsideration by the tax administration (recours gracieux). The application may refer to direct and assimilated taxes, related penalties, recovery penalties, and fiscal fines.
- Conditional rebate (remise conditionnelle). Conditional rebate could relate to penalties and fiscal fines. It may concern tax penalties applied under direct taxes, turnover taxes, registration fees, stamp duties, indirect taxes, and non-codified taxes. In order to enjoy these arrangements, the taxpayer must make a written application to the competent authority to which the conditional rebate is requested.
It is provided by the FL2021 that paid sums relating to the discharge of assessment notices, para-fiscal taxes, as well as fines and penalties payable no later than 31/12/2020 - the recovery of which is assigned to the tax collectors - are anticipated to be settled on their main rights of the tax debt, when this is paid in a lump-sum. Taxpayers who undertake to pay the full main amount on their tax debt in a lump-sum payment by December 31, 2021 at the latest are exempt from late payment penalties. (Article 75 of the FL2021).
Statute of limitations
Subject to some exceptions, the fiscal statute of limitations is four years.
Topics of focus for tax authorities
The tax administration will focus on non-deductible expenses, the declaration of turnover, and, more often, on transfer pricing issues.