How do you challenge an incorrect tax bill in France?
PUBLISHED: 11:57 06 March 2017 | UPDATED: 13:55 14 March 2017
Discovered an error in your French tax bill? Find out how to challenge the bill and get a resolution as quickly as possible
Robert Kent is managing director of Kentingtons Tax and Investments Consultants
Increasingly over the last few years, very significant errors have been appearing in tax bills (avis d’impôts), nearly always in favour of the tax office. Once you have recovered from the shock of an unexpectedly large bill, what should you do next?
Firstly, please consider the possibility that the tax office just may be right, so don’t forget to be kind and courteous when speaking to them and explaining your problem. Offer your thanks if they speedily correct the error. It is unhelpful to be on poor terms with your local tax office.
What errors could there be?
We have seen a wide range of mistakes made, however the main one has certainly been the application of social charges, mostly in relation to UK rental income, but also to pensions where the payer has a valid S1 form. In both they cases, social charges should not ultimately be applied, but they often are.
For UK rental income, the social charge is calculated and added; however, there should be another line that offers a tax credit equal to the amount of the calculated social charge. For pensions, it should simply not show at all, so no credit showing.
If you are absolutely confident that a mistake has been made, what should you do?
This is a suggested course of action; whatever action you decide to take, be sure to do it as quickly as possible.
1. Send an email to your tax office. This is one of the best and quickest ways to register your concerns. If you are fortunate enough to have an efficient tax office, this can work well. Your tax bill will have an email for your tax office, which will look like this: sip.(town name)@dgfip.finances.gouv.fr
2. Visiting the website impots.gouv.fr is another possible option. Log in to your account selecting the following option: Effectuer une démarche > faire une réclamation > réclamation sur l’impôt sur le revenue
3. If you are a competent French speaker, or know someone who is and is happy to help, a visit to the tax office should get the quickest result. If you can get an appointment with an inspector, you will spend far less time waiting. Call or send an email to get an appointment. During very busy periods, just turning up and taking a tickets is the only way. Often a face-to-face meeting works well and if you are very lucky you can get a correction, a dégrèvement, there and then.
What happens if they disagree and state that the figure requested stands?
1. Send a registered letter. You have met the inspector and they disagree, but you need the tax demand to be placed formally in contention to progress. You can do this with the inspector, but these verbal requests may ‘get lost’. A formal letter sent recommandé avec accusé de réception must be formally acknowledged and cannot be ignored. Once you have written confirmation that the demand is in contention, then you can take it to the next step.
2. The conciliateur fiscal. This is just a department of the same tax office. As long as you know why you shouldn’t be paying the tax and set your argument out clearly then they will review the demand and will often rule in your favour, offering the dégrèvement. This works for us nearly all the time, with hardly anyone having to go on to the next stage
3. The médiateur (the médiateur des ministères économiques et financiers). This is not a section of the local tax office, but an office for the region which has the right to overrule the local tax office. Note that this can take a long time, so the next problem is…
What to do about the bill?
Mediation can take a long time so the deadline for payment will usually have passed. This is certainly an area of stress. If the bill is affordable, then our advice is often to pay and claim it back. You may ask why pay if it is wrong. If it is in contention with the tax office there is rarely a problem, but once it gets to the mediator, the tax office instruction to the French treasury is that the bill is due and they will simply take it from your bank account – with penalties! Clearly penalties will also be reimbursed if the subsequent ruling is in your favour. If you pay the bill then there will be no nasty surprise, no penalties and planning is easier. Stressful, but considerably less so.
3-4 months is typical for mediation but it can take longer. What should you do next if they say no?
Legal action. For us it has never come to this. Mediation is slow but thorough. If mediation rejects your claim you must take professional advice and be absolutely sure that you have a claim before taking this step. Do it immediately, as you have limited time in which to take this action.
What about next year?
Keep a file of all communication, and make sure that it is neat, tidy and in order. This will make any future meetings easy. Log exact dates and times of conversations with as much detail as possible. If they repeat the same mistake – and this happens more often that you might think – then it is good to know you can easily remind them of what happened last year and save everyone the time and trouble.