In a press release dated 29 May 2020, the French Minister for Government Action and Public Accounts announced new terms for the payment of corporate income tax (impôt sur les sociétés – IS) and corporate value-added contribution (contribution sur la valeur ajoutée – CVAE) instalments.
I. Adjustments applicable to corporate income tax instalments
Postponement of the payment of the second instalment: Normally due on 15 June 2020, the second corporate income tax instalment may be paid until 30 June 2020, without any particular formality.
New optional and flexible rules applicable to instalment adjustments:
- The second instalment may be adjusted so that the sum of the first and second instalments equals to at least 50% of the amount of the forecast corporate income tax of the current fiscal year (a margin of error of 30% is allowed);
- The third instalment may be adjusted so that the sum of the first, the second and the third instalments equals to at least 75% of the amount of the forecast corporate income tax of the current fiscal year (a margin of error of 30% is allowed);
- The fourth instalment may be adjusted so that the sum of all the instalments made equals to at least to the amount of the forecast corporate income tax of the current fiscal year (a margin of error of 10% is allowed).
These rules apply to the second, the third and the fourth instalments of current and future fiscal years, with the exception of fiscal years starting as of 20 August 2020. They are optional and require no particular formality. Both the corporate income tax and the 3.3% social contribution are concerned. Please note that rules applicable to the last instalment for large companies remain unchanged.
Additional rules applicable when the instalment of March 2020 has been postponed:
- Said postponed instalment of March is due on 15 June 2020;
- The instalment of June is suspended and its amount is to be carried forward into the instalment of September (the company may apply the new rules described above);
- If the instalment of March corresponds to a fourth instalment (i.e. fiscal years ended between 20 February and 19 May 2020), it is suspended (to be carried forward into the balance) and the first instalment for the following fiscal year must be paid following ordinary law.
II. Adjustments applicable to corporate value-added contribution instalments
Postponement of the payment of the first instalment: Normally due on 15 June 2020, the first corporate value-added contribution instalment may be paid until 30 June 2020, without any particular formality.
New optional and flexible rules applicable to instalment adjustments:
- The first instalment may be adjusted with a margin of error of 30% (instead of the 10% provided for under ordinary law);
- The second instalment due on 15 September must ensure that the sum of the two instalments equals to the total amount of 2020 corporate value-added contribution (a margin of error of 20% is allowed).
III. Conditions and penalties applicable to both corporate income tax and corporate value-added contribution instalments
For large companies (company or group with at least 5,000 employees or a turnover in excess of 1.5 billion euros), the new modulation faculties are subject to their compliance with the commitment of responsibility (engagement de responsabilité).
In the event of insufficient adjustment, the 5% surcharge and default interest may be applied, at the time of the balance, on the difference between the expected amount (minus the margin of error) and the amount paid.
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