Companies facing Covid-19: What are the tax measures?

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In order to reckon with the impact of the coronavirus epidemic on the economic activity, and in accordance with the announcements made by the President of the French Republic on 12 et 16 March 2020 1, the French Tax Authorities have taken exceptional measures in order to support businesses. Moreover, a new law amending the Finance law for 2020 and a sanitary emergency law tackling the Covid-19 epidemic 2, published on 24 March 2020, provide for various measures in order to support companies. Similar social measures have also been implemented.  

Which taxes are concerned?

The support measures concern direct taxes, i.e. corporate income tax, corporate real estate tax (cotisation foncière des entreprises “CFE”), property tax (taxe foncière) and payroll tax (taxe sur les salaires). VAT will not benefit from these measures. 

What are the support measures?

Deferral of payments will be granted to companies.

Indeed, these companies may request the deferral, without any penalty, of their next tax payment deadlines (only direct taxes).

Companies which have elected for the payment of the CFE and the property tax in monthly instalments may request the suspension of their monthly payment. However, the suspended payment will have to be paid along with the payment of the tax balance. 

In addition, tax rebates may be granted, after assessment of the request, to companies facing specific financial difficulties.

Which are the eligible companies? How can they benefit from these measures?

Companies may request the deferral for three months, without any penalty, of their next tax payment deadlines, without having to provide any justification. 

To this end, the company must fill in a form which has to be filed with the French Tax Authorities’ office in charge of the company (Service des Impôts des Entreprises) (form available on the website impots.gouv.fr and template attached).

The eligible tax, the deadline, and the amount payable must be specified. 

If the companies have already paid their taxes due in March, they may request a refund to the respective French Tax Authorities’ office.

Companies wishing to benefit from a tax rebate (and not just a deferral), must provide details about their financial difficulties and why these difficulties cannot be overcome by a simple deferral of the tax payment (decline in turnover, other outstanding debts etc.).

Finally, companies which have elected for the payment of the CFE and the property tax in monthly instalments may request the suspension of their monthly payment. This request must be filled online, via the company’s personal web account on impots.gouv.fr.

What are the other economic measures?

The President of the French Republic has announced that companies may benefit from a deferral of payments for their bank loans and, in case of great financial difficulties, they may call upon the State guarantee so that it will take over the payments. Regarding this guarantee, Article 6 of law amending the Finance law for 2020 provides that it will apply to loans issued between 16 March 2020 and 31 December 2020. Certain conditions will have to be fulfilled in order to benefit from it. These conditions as well as the guarantee's features will be determined by Order of the Minister of the Economy. Nevertheless, it is already provided by the law that the decision to award the guarantee regarding loans granted to companies having more than 4,999 employees or whose turnover exceeds EUR1.5 billion, will have to be made on a case by case basis by Order of the Minister of the Economy. Bpifrance will be in charge of managing these guarantees. 

Besides, the BPI has also announced that exceptional measures will be taken in order to support companies affected by the Coronavirus’ consequences (grant of the BPI’s guarantee for loans granted by private banks, grant of loans by the BPI without guarantee, extension of the guarantees without management fees, medium and long-term credit facilities readjustments for clients of the BPI).

What about ongoing proceedings and the statute of limitations applicable to the tax authorities?

Article 11 of the sanitary emergency law authorizes the government to take by way of Ordinances all measures easing various timeframes, including those applicable in the tax field. Thus, the following timeframes could be adjusted in order to take into account the current situation:

  • timeframes applicable to the filing, the processing of returns and to requests filed with administrative authorities (e.g. the tax authorities);
  • timeframes within which French tax authorities’ audits must be carried out;
  • statutes of limitations of all kind, except for those which are arising from a court decision.

The deadlines which must be met under the penalty of being declared null, void, or being barred because of a statute of limitations etc., could be interrupted, suspended or deferred.

Therefore, the filing timeframes for certain requests would be extended (e.g., VAT credit refund requests, all requests which must be filed before a certain deadline with the tax authorities). 

Furthermore the statute of limitations applicable as a matter of tax and the time period within which the tax authorities may enforce the collection of taxes should be suspended. 

The exact scope and detail of these provisions will have to be specified by means of Ordinances to be issued within three months of the publication of the law. 

Finally, the Minister of Public Action and Accounts, Mr. Gérald Darmanin has declared that ongoing tax audits should also be suspended and that no new tax audit should be initiated for the time being.


1 Amended Finance Law for 2020, no. 2020-289, dated 23 March 2020
2 Sanitary emergency law tackling the Covid-19 epidemic, no. 2020-290, dated 23 March 2020