What Happens During a Tax Audit in France? Part 3: Tax Litigation in France as Seen by a French Tax Lawyer

If, after a thorough analysis by a French tax lawyer, it appears that the tax assessments and/or penalties imposed are disputable, the taxpayer has the right to challenge them.

Tax litigation may involve providing additional supporting documents or explanations that were not presented during the tax audit. In some cases, it can also be argued that the tax authority’s interpretation of tax law is questionable or inconsistent with legal standards, which apply to both the taxpayer and the tax administration. These standards may come from legislation, international tax treaties, administrative guidelines, or court rulings.

Additionally, procedural errors, which protect the fundamental rights of taxpayers, may have occurred, such as missed deadlines, unavailable appeal options, or violations of the requirement for fair and oral hearings.

Thus, it is often possible to defend against tax claims when there are solid arguments to challenge the assessment. However, this requires an expert analysis by a tax professional.

The litigation process starts with a written claim that must be filed within a specified deadline—usually by December 31st of the second year following the tax collection year. In certain cases, this deadline may be shorter or, conversely, extended.

The formal complaint, which contests the taxes based on relevant legal arguments and/or the submission of additional evidence, is sent to the tax administration for re-examination.

An important aspect of the process is that the claim can be paired with a request for payment deferral, which obliges the tax authorities to halt any collection actions. It is crucial to coordinate with both the audit department handling the claim and the enforcement department to prevent measures such as wage garnishments or bank account seizures. Keep in mind that tax bills are legally due immediately upon issuance.

Seeking assistance from a French tax lawyer is essential, as navigating tax disputes requires expertise, skill, and a deep understanding of both tax law and the French tax system.

Once the tax administration reviews the claim and requests any additional supporting documentation, a decision will be made. This decision may fully accept the claim, partially accept it, or reject it entirely.

In some cases, the administration might not respond, leaving the case unresolved.

If the decision is unsatisfactory or if no response is received after six months, the dispute can be brought before the appropriate court: either the Administrative Court (for income tax, corporate tax, and VAT) or the Court of First Instance (for real estate wealth tax, inheritance taxes, and other registration duties).

Legal action must be taken within a strict two-month period from receiving the decision. This deadline is extended for non-resident taxpayers.

Engaging an experienced tax lawyer is crucial to ensure the defense of your interests, the development of a robust strategy, and an accurate evaluation of your chances of success.

Founded in 2007, CM-Tax and its team of bilingual tax lawyers, based in Lyon and Marseille, operate across France. We offer our expertise in French tax law to assist, advise, and defend the interests of both French and international clients.