Tax Administration and Fiscal Control in France

Fiscal control in France

Internal Revenue Service is a part of the French Ministry of Economy, Finance, and Budget, headed by Minister-Delegate for the budget. Tax administration is carried out mainly via the IRS and the Department of fees and other revenues. 

Structurally, the main tax office consists of five departments:

1) Department of Drafting of Legislation (functions: drafting of laws and other regulations in the field of taxation);
2) Department of General Tax Management (functions: ensuring accumulation of tax revenues in the state budget);
3) Department of Disputes (functions: complaints and preparation of materials for criminal prosecution for tax offenses);
4) Department of Lands and Public Property (function: cadastral valuation of lands, management of movable and immovable state property);
5) The Personnel Department (functions: staffing tax Service).

Main Administration of Duties and Other Revenues organizes the work of customs checkpoints on the borders of France and within the country. It oversees compliance with the state ban on the sale of weapons, drugs, etc., and also carries sanitary control of foreign trade.

General Directorate of Accounting determines the amount of state revenues on the basis of tax revenue coming from the departments of taxes and duties and other government departments.

Number of Tax Service is about 80 thousand employees in 830 tax and 16 data centers. Staff are known to the tax authorities by carefully selected screenings. Employees of tax centers calculate the tax base for each tax, collects tax payments, and verifies the correctness of taxes. Levy is regulated by the Tax Code, which is considered a model for other countries. Each Code specifies the approval of the budget law, and provides comments to the code.

Some of the details of penalties and the organization of tax audits can give an idea about tax control in France: so, for late submission of tax declarations will be charged the full amount at the same time a fine of 0.75% per month (9% per year). If the income is deliberately hidden to evade tax payment, the penalty ranges from 40 to 80% of the amount of tax assessed.

Serious violations of tax laws (falsification of documents, etc.) provides for criminal liability, including imprisonment.

In France, charges of tax evasion of legal entities are presented only to the head of the company, and in the case of an overpayment of tax, the corresponding difference is immediately returned with interest.

Computerized technology is intensively used in the process of collecting and processing tax information. Internal Revenue Service has a special unit dealing with simplifying workflow and automation of calculations. Declarations processed in special computer centres, each of which serves a few dozen tax centers, and also provides for the exchange of tax information and services. For example, in case of need, specific computer center can take over the processing of declarations of another center that is overworked at the moment.

Tax process is carried out on a uniform state accounting system mandatory for all categories of taxpayers. Herewith, simplified accounting for small firms. All companies located in the country, including foreign, regardless of the type of activity (industry, construction, agriculture, trade, etc.) to account for the cost of production of goods, works, and services, the definition of financial results using a single plan accounting. This provides a generalization of financial performance across the country, it’s important to make predictions of economic development, drafting the state budget, conducting national statistics; it also facilitates the analysis of financial and economic activity of enterprises, as well as tax control, brings confidence in the action of entrepreneurs, and creates the conditions for properly automated information processing.

Work on the revision and improvement of the plan rests with the National Accounting Council of Accounting, a public agency body composed of representatives of private businesses, public institutions, universities, and trade unions. The Council is headed by senior official of the Ministry of Economy and Finance, which is subject to a working unit consisting of highly qualified specialists in the field of accounting.

The main function of the Council is to improve the accounting and analytical accounting in enterprises, bringing it into line with the requirements of the economic development and fiscal interests of the state. It is important that discussions on the accounting methodology can be carried out before a decision is made, as after the decision is made, it becomes the norm, mandatory for all businesses and commercial organizations. Along with the establishment of rules of cost accounting and financial results, the Council attaches great importance to simplifying accounting and harmonization tax and compliance with EU requirements. The end result of the work of the Council is periodic release of a new version of the plan of accounting.

Most popular articles: