Due to the pandemic, the deadlines for filing certain tax returns as well as the deadlines to realize certain tax formalities have been postponed.

1. TAX RETURNS

a. Income tax

The start date for submitting income tax returns has been postponed from April 9, 2020 to April 20, 2020. Additionally, the deadline for submitting such tax returns vary from region to region and according to the filing process and are dated from June 4, 2020 to June 12, 2020.

Furthermore, the schedule attached to the press release of April 17, 2020 postpones to June 30, 2020 of the 2019 tax returns to be submitted by businesses and including industrial or commercial income (French "BIC" category), non-commercial income (French "BNC" category), agricultural income (French "BA" category) or real estate income (French "revenus fonciers" or "RF" category), filed electronically. It seems that this deadline postponement would only apply to taxpayers for whom part of their income can only be ascertained after the income tax returns have been filed, but a clarification from the French tax authorities would be welcomed.

b. Other tax returns

A press release dated April 17, 2020 from the Ministry of Action and Public Accounts, has indicated that all deadlines for filing tax returns and other similar declarations in May are postponed to June 30, 2020 (for more details see the table below).

In addition, companies experiencing difficulties may also request to postpone to June 30, 2020 the payment of the corporate income tax and balance of the value added tax of businesses (contribution sur la valeur ajoutée des entreprises or "CVAE")^[1].

However, the French tax authorities reiterated that these measures are intended to support companies experiencing difficulties, and that it was therefore strongly recommended for companies able to pay their taxes on the normal due date, to do so.

Some exceptions apply:

• the deadline for the declaration CVAE no.1329-DEF remains May 5, 2020 for creditor companies;
• deadlines for declaring VAT are not affected by the deferral measures (but are subject to some flexibility);
• the 3% annual tax return on the market value of real estate is not, at this stage, affected by the deferral measures and must be made May 15, 2020 at the latest.

With regard to declarations not subject to the deferral measures, the French tax authorities have indicated that all companies experiencing administrative or material difficulties in filing their declarations, for example due to the impossibility to gather particular information, would be treated with benevolence and not be penalized.

Finally, contrary to what was initially indicated by the French tax authorities, the declaration no. 3350 of the Tax on Commercial Surfaces (Taxe sur les Surfaces Commerciales) has not been postponed until 15 July 2020.

2. TAX FORMALITIES

a. Tax consolidated group

The French tax authorities specified that the option period (délai d'option) for the tax consolidation regime is extended under the same conditions as the corporate income tax returns, i.e. until June 30, 2020, as indicated in the press release of April 17, 2020.

Furthermore, while the exercise of the option must in principle be notified on plain paper according to the model established by the administration, it will be possible to send a signed and scanned PDF document by e-mail to the competent tax service, via the secure messaging system of the company's tax account.

The administration did not specify whether the subsidiaries' approval to be a part of the group would also be impacted by the postponement of the deadline. However, it would be logical that the same deferral rules should apply, and the press release of April 17, 2020 refers extensively to the "tax consolidation scope" and not only to the option of the parent company of the consolidated group.

b. Corporate income tax election

The option to be subject to corporate income tax must in principle be exercised before the end of the third month of the financial year for companies wishing to be subject to it for the first time. The French tax authorities specified that there is no provision for a deferral of the filing for the exercise of such option.

However, they indicated that an additional period could be granted by the tax service in charge, at the request of the relevant companies, if they can justify that they are unable to exercise the option within the three-month period because of the closure of their accounting firm or their premises.

Detailed schedule of the filing and payment date deferrals

detailedschedule_filingpaymentdatedeferrals_france_may2020.jpg

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[1] Subject to, for large companies, to not pay dividends or realize any share buyback until the end of the year. Please see our article "Covid-19 | Dividends and share buybacks: commitments imposed on large companies benefiting from government cash support measures" for more information.

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