|
This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 Every year the French tax authorities called Direction Générale des Finances Publiques " DGFIP " aim to audit 15% of the business entities.
The frequency of the audit varies largely according to the size of the business. In principle all fiscal years of large multinational corporations are audited . DGFIP performs about 53 000 tax audits each year (DVNI about 13 000; DIRCOFI about 15 000 and DSF about 30 000)
Large multinational corporations are audited each year. Most of the audits are carried out from the tax office without inspecting the taxpayer's books and records. This type of audit is called "Contrôle sur pièces". These audits aim to compare the tax returns of the entity with information and data received from third parties. The taxpayer or his (her) adviser are only informed if the auditor detects irregularities or potential grounds for assessments.
Only a small percentage of this type of audit will trigger a full audit of books and records. A taxpayer may be selected at different levels. The small businesses are selected by the local tax office called Serrvice des Impôts des Entreprises or "SIE" processing its tax return. The selection is done according to criteria and risk analysis provided each year by the DGFIP. The first step of the selection process is done automatically by a computer system "ILIAD".
The second step is done manually by a tax officer. If the tax officer considers that the taxpayer should be audited, he proposes the audit to his (her) supervisor who will validate or not the proposal. The list of the taxpayers proposed for a field audit is presented to the director of the directorate who is competent to decide the audit. If the director approves the field audit, the taxpayer is listed in the annual field audit program. The selection of taxpayers to be audited is also performed at the departmental level, at the regional level or at the national level by research and investigation teams, research and planning teams, general audit teams and revenue audit teams.
The selection process is similar to the one used at the local level (See above).
The tax auditor has very little influence on the decision to audit a taxpayer. Before the beginning of the audit, he can however ask his supervisor not to audit a pre-selected taxpayer. If his supervisor agrees, he could be moved to another tax audit. After the beginning of the audit, the tax auditor cannot stop the process. According to the circumstances, he can only suggest his supervisor to extend the scope of an audit or exceptionally to narrow it.
Each tax auditor must audit a specific number of taxpayers every year.
|
Close
