Article 14 of the amending finance law for 2016 has introduced an adjustment of the conditions for carrying out computer processing operations during computerized tax audits. The modifications are related to:
- options (b) and (c) of article L.47 A, II of the Book of Tax Procedures (LPF) regarding processing requests (files to be submitted and deadlines);
- penalties for non-delivery of files.
When the French Tax Administration (FTA) wishes to carry out computer processing, it sends a request for treat-ment to the taxpayer. The latter has the choice between three options:
- (a) completion of the request for processing by the FTA on the IT system of the tax payer;
- (b) completion of the request for processing by the taxpayer on his IT system;
- (c) completion of the request for processing by the FTA on the basis of the raw files transmitted by the taxpayer.
The amendment is related to both the nature of the files to be delivered and the deadlines of options (b) and (c).
In the past, where the taxpayer chose option (b), he only had to provide the results of the processing into files and only had to keep the intermediate files available for checking on site.
For tax audits opened since January 2017, the taxpayer will now have to provide, in addition to the result-ing files, the documents and raw data submitted for inspection so that the FTA is able to reproduce the treatments on its own.
Regarding the deadlines, the law now lays down a 15-day delay for submission of files (for both options (b) and (c)).
The law introduces a new fine in case of non-delivery of the files equal to 10% of the rights charged to the taxpay-er (with a minimum of € 5,000). Because the penalty is the same that the one applied in the event of non-delivery of the FEC, we understand that this fine applies to each audited fiscal year.
These amendments apply to tax audits notified since January 1, 2017.
The FTA has strengthened its supervisory powers. It is urgent for companies to organize their tax filing to meet the new requirements.