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Exceptional tax measures for businesses affected by Covid-19

Update on March 23rd 2020


The French tax authorities have just issued another set of exceptional tax measures to support businesses in an economy impacted by the Covic-19 outbreak. In their statement, the tax authorities also clarify some of the measures introduced last week.

Sped up refund of tax credits available in 2020

Ahead of the deadline for filing their tax return, businesses entitled to some tax credits in 2020 may claim a refund of the available credit after payment of corporate income tax.

This measure applies to all tax credits refundable in 2020, such as the competitiveness and employment tax credit  (Crédit d’impôt compétitivité et emploi – CICE), the research tax credit (Crédit d’impôt recherche – CIR –beware that refund is possible only up to the share of tax credit that expires in 2020) and others in relation to some struggling sectors :

  • film industry tax credit
  • broadcast industry tax credit
  • foreign film and broadcast industry tax credit
  • entertainment industry tax credit
  • music industry tax credit
  • video game industry tax credit.

To claim a refundable tax credit, businesses shall connect to their impots.gouv.fr website account (Espace professionnel) and file:

  • the refund application form (form nb 2573);
  • the tax credit return (general form nb 2069RCI or specific return, depending on the kind of tax credit, unless such a return has already been filed);
  • in the absence of any corporate income tax return, the statement of corporate income tax balance (form nb 2572) which settles corporate income tax to be paid and tax credit to be refunded in 2020.

According to the tax authorities, the corporate income tax services (Service des impôts des entreprises - SIE) are up and ready to deal with refund claims within a few days.

Forward averaging, deferral or remission of direct taxes

Claims for forward averaging or deferral of direct taxes instalments (corporate income tax instalment, payroll tax, corporate real estate contribution and real estate tax monthly instalments) shall be made using the specific Covid-19 simplified claim form. It must be emailed either to the appropriate corporate income tax services or to the Division of major companies (Direction des grandes entreprises – DGE), depending on which services the business reports to.

Deferral is to be granted for three months, no penalty incurred or supporting information required.

Where businesses managed to block the March instalments SEPA direct debit, there is nothing else to be done.

Businesses which pay corporate real estate contribution and real estate tax on a monthly basis may suspend their payments. To do so, they shall either connect to their impots.gouv.fr website account (Espace professionnel) or contact the services in charge of payments (Centre prélèvement service). The outstanding balance will be paid at the end of the year, no penalty incurred.

Please note that indirect taxes (VAT, excise duties, etc.) are not within the scope of those measures. Payments to the Treasury remain to be made on planned due dates without any possibility to postpone. The same goes for pay-as-you-go income tax collected by businesses.

Businesses, for which tax averaging or deferral is not enough to face Covid-19-induced dire straits, may apply for direct taxes remission.

Please note that remission is not available for VAT and other indirect taxes, neither it is for pay-as-you-go income tax collected by businesses.

Any claim for remission must be supported by relevant information: the Covid-19 simplified claim form must specify information about turnover decline, other liabilities to settle, cash position, etc.

The tax authorities specified that the situation of the business, and more particularly the difficulties it faces, will be thoroughly reviewed by their services.

At any time, freelancers may revise downwards their 2020 income for the tax authorities to adjust their pay-as-you-go income tax rate as well as the monthly or quarterly instalments they pay. They may also defer an instalment from one month to the next (within the limit of three times a year, in a row or not), or from one quarter to the next (only once a year).

To adjust their income or opt for deferral, freelancers shall connect to their impots.gouv.fr website personal account (Espace particulier) and select the « Gérer mon prélèvement à la source » section (« Manage my pay-as-you-go income tax »). Please note that one shall take action before the 22nd of a month for changes to be effective the following month. In the most straitened situations, freelancers may temporarily cancel the payment of an instalment. Payment will then be deferred, yet eventually not cancelled.

Trade of goods declaration process (Déclaration d’échange de biens – DEB)

Economic operators who face problems in processing their trade of goods declaration shall contact as soon as possible the appropriate Data input interregional centre (Centre interrégional de saisie des données – CISD) or the Domestic division of foreign trade statistics (Division nationale des statistiques du commerce extérieur – DNSCE), depending on which services process their declaration.

Do not hesitate to contact us should you have questions or wish us to assist you.

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