Case law: tax audits after the deadlines
December 21, 2022
What does the Council of State say about compliance with deadlines during a tax audit?
In a decision dated May 20, 2022, the Council of State was led to take a position on the deadline granted to the French tax authorities to carry out an on-the-spot audit of its accounts and the consequences that exceeding this deadline could generate.
The facts submitted to the Council of State
In the case presented to the Council of State, a company had been the subject of an accounting audit, the first intervention having been carried out on 4 November 2011 and the last on 30 January 2012.
Following this audit, the French tax authorities questioned the refund of a tax credit and therefore notified the company of additional Corporate Tax contributions resulting from it.
The company requested the cancellation of these increases on the grounds that they were based on information collected (during the audit of the accounts of a third party) after the deadline available to the auditor to carry out his on-the-spot checks.
What the case law says: consequences of too long a verification period
This judgment recalls that the French tax authorities have a limited period of time to carry out their accounting audits.
Please note that this principle is only valid for companies whose annual amount of turnover or gross receipts before tax does not exceed the limit for admission to the simplified tax regime. This limit is set at €818,000 for companies whose purpose is the sale of goods or the provision of housing, and €247,000 for service providers.
What about other companies? The auditor can stay on their premises as long as he wishes. In theory, only the statute of limitations can oblige him to close his investigations.
If the limited verification period is not respected, the control procedure will then be vitiated by an irregularity. Consequence: the discharge of the upgrades and reminders.
Conclusion: the Conseil d'Etat recalls that the Tax Administration is required to carry out the tax audit within a given deadline. During an inspection, be meticulous about following the procedure!
Source: Légifrance
