23 March 2020 Emergency Act No. 2020-290 declared COVID-19 state of health emergency applicable over the next 2 months following enforcement (i.e. 24 March), subject to extension or early termination. Article 11 authorises the Government to legislate by means of orders to take measures in many fields to deal with and limit the impacts of the COVID-19 outbreak. The first 25 orders were issued on 26 March. We’ll focus on the four orders presented by the Minister of Justice which will affect tax matters.
- Extension of terms and adaptation of procedures
- Adaptation of the rules applicable to administrative and judiciary courts
Extension of terms and adaptation of procedures
1. New terms and deadlines
Order No. 2020-306’s first five articles apply to terms and measures that expired or will expire between 12 March 2020 and one month from the date of termination of the state of health emergency (hereinafter "legally protected period"). As the state of health emergency started on 24 March for a period of two months (i.e. until 24 May 2020), the end of the legally protected period is 24 June 2020. However, bear in mind that were the state of health emergency to be extended, the legally protected period would also be extended beyond 24 June 2020.
Deadlines are to be postponed, yet to the exclusion of:
- Deadlines for filing returns on which are based assessment, payment and collection of taxes and duties (Article 10, II). Still, there might be further announcements by the Administration on the matter, as each deadline for filing such or such tax return is getting closer;
Update on April 2nd 2020: Deadline for filing personal income tax returns has been postponed in June (from 4 until 11 June depending on where taxpayers live in France – 11 June for Paris area);
- Deadlines and measures resulting from the application of criminal law and, more generally, those adapted by other provisions of the Emergency Act or one of the orders.
Article 2 thus provides that "any deed, appeal, claim, formality, registration, declaration, notice or measure of publicity” required by statutes or regulations under penalty or under pain of being declared “void, null, time-barred, unenforceable, inadmissible, expired, withdrawn ex officio, subject to a derogatory regime or disqualified" and which should have been completed or executed during the legally protected period, will be deemed duly performed if it has been so within a term that cannot exceed two months after the end of the legally protected period. Where legal terms are shorter than two months, they apply as such from the end of the legally protected period. In tax matters, for example, this measure leads to postpone until 24 August 2020, where it expires during the legally protected period, the two-months deadline up until which taxpayers can bring to court their claim after dismissal by the tax authorities.
Any payment prescribed by a statute or regulation for acquiring or securing a right is also to be postponed, to the exclusion of:
- A payment derived from a contractual obligation based on contract or general law; and
- A tax payment (see, however, earlier announced measures).
Terms expired before 12 March 2020 are not be postponed. Terms that are to expire more than one month after the end of the state of emergency are neither suspended, nor extended.
The order’s Article 3 specifies that deadlines that parties are to meet where they are under an inquiry measure ordered by an administrative or a judiciary court -submission of a document or a statement- and which expire during the legally protected period are, without further formality, postponed until two months after the end of the period - i.e. up until 24 August 2020. However, a judge or a competent authority may decide to adjust or put and end to the deadline extension where the measure of inquiry was ordered before 12 March 2020.
2. Specific provisions regarding administrative deadlines and procedures
Articles 6 to 12 apply to State authorities, regional and local authorities, their public administrative institutions as well as public and private law bodies and persons entrusted with a public service mission, including social security bodies. Article 7 specifies that, subject to obligations arising from an international commitment or European law, terms on the expiry of which "a decision, an agreement or an opinion" by one of the aforementioned bodies or persons "may or must be reached or is implied" and which have not expired before 12 March 2020 shall be suspended on that very date until the end of the legally protected period. Terms of a similar kind that should have started during the legally protected period, will start when that period is terminated. The same rules apply to deadlines the aforementioned bodies or persons are to meet in their review of the completeness of a file or in their request for additional documents as they examine an application or claim, as well as to deadlines for public consultation or concentration.
In tax matters and in our opinion, these rules should apply to any request for approval from the tax authorities.
Article 10 is specific to tax matters: It provides for a suspended statute of limitations for tax reassessments which were not time-barred on 12 March 2020 and were to be so on 31 December 2020. The latter are suspended between 12 March and the end of the legally protected period (Article 10, I-1°). In practice, a tax reassessment that should be time-barred on 31 December 2020 will keep on going for another three months and 12 days, based on a two-months state of emergency.
In addition, any deadline to be met in the course of a tax audit is suspended between 12 March and the end of the legally protected period, both for the taxpayer and the French tax authorities. Any term that should have started to run during the above-mentioned period will only run from the end of the legally protected period (Article 10, I-2°). Terms applicable to tax rulings are also suspended.
Finally, Article 11 provides for the collection of taxes as well as disputes over the collection of taxes, terms with a binding deadline (to be met under pain for the term of being declared “void, null, time-barred, unenforceable or disqualified”) which were still running on 12 March 2020 or start running during the legally protected period, are suspended for the duration of the state of health emergency plus three months - i.e. until 24 August 2020.
Adaptation of the rules applicable to administrative and judiciary courts
Order No. 2020-303 adapts the rules of criminal law procedure to enable the continuity of criminal courts’ activity. Orders No. 2020-304 deals with other judiciary courts and No. 2020-305 deals with administrative courts, except where they provide otherwise.
For cases brought to the administrative courts, state of emergency measures apply from 12 March 2020 up until 24 May 2020 (end of the state of emergency). For cases brought to judiciary courts, both criminal and non-criminal cases, state of emergency measures apply from 12 March up until an extra month after the state of emergency terminates, so as things stand, up until 24 June 2020.
2. Rules applicable to cases brought to administrative courts
Order No. 2020-305 provides for many derogations to the procedural rules usually applicable to administrative cases.
The following measures are particularly worthy of attention:
- Discovery (documents, acts and opinions) may be carried out by any communication means (Article 5);
- Hearings may be broadcasted (Article 7);
- The court’s chief magistrate may excuse the public rapporteur (“rapporteur public”) from presenting conclusions at the hearing (Article 8);
- And finally, a derogation is set regarding Article R.751-3 of the Code of Administrative procedure which states that the court ruling’s notification must be made to the parties, so that the time for appeal runs as of this notification regardless of legal representation. This derogation provides for the validity of a court ruling’s notification made to the representing lawyer, if any. As a result, when a party is duly represented by a lawyer, on-line notification to the lawyer on Télérecours is constitutive of the notice of appeal (and not the client’s notification by mail) (Article 13).
Article 15 of the order specifies that the extension rule laid down in Order No. 2020-306 (see section 1) is applicable to cases brought to administrative courts. In practice, deadlines for appeal which expired or are to expire between 12 March and 24 June 2020 are, as things stand, postponed to 24 August 2020.
In addition, Article 16 provides for an extension of the term for inquiry measures to come to a close. If it expires between 12 March 2020 and the end of the state of emergency, it is extended, without further formalities and as things stand, up until 24 June 2020, unless a magistrate grants extra extension of the term.
Finally, Article 17 specifies that for the period covered from 12 March 2020 to the end of the state of emergency, the starting point of the term granted to a magistrate to rule is postponed to the first day of the second month following the end of the state emergency. In tax matters, the following procedures are covered by this provision:
- Emergency tax proceedings as regards payment deferral - Article L.279 of the Tax procedural code which sets that the court must rule within one month; or
- In blazing tax offence proceedings - Article L.16-0 BA of the Tax procedural code which sets that the court must rule within 15 days.
As things stand, these terms will start running from 25 July 2020.
3. Rules applicable to cases brought to judiciary courts
The extension rule provided for in Order No 2020-306 is also to apply to cases brought to judiciary courts as they rule on non-criminal matters (Article 2).
The order provides for the possibility to transfer the case from one court to another if the former faces an impediment to rule.
Regarding hearings, adjustments intended for administrative courts also apply to judiciary courts.
Finally, regarding criminal cases, prosecution and sentencing statute of limitations are suspended from 12 March 2020 until 24 June 2020, as things stand.
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