Corporate tax returns: towards a digitalized process?

While the French tax system is often criticized, France is one of the best performers when it comes to digitizing procedures. The corporate tax return, or liasse fiscale, is a series of accounting and financial documents produced each year by a company and its chartered accountant for the tax authorities.

In particular, it contains the income statement and the 18 appendices required to justify each item in the financial statements. This is an important document, as it determines the amount of corporate income tax to be paid. The transmission of some of these items was subject to lengthy paper procedures, using administrative forms that were considered time-consuming and difficult to manage.

The French tax authorities have recently launched their " demarches-simplifiees.fr " platform, designed to lighten the administrative burden.

Complementary to the impots.gouv.fr website, it aims to contribute to the dematerialization of tax declarations for all companies.

What procedures are covered by dematerialization?

Many tax returns can be filed directly on the Impots.gouv.fr website, using a personalized professional space.

You can take the following steps:

• VAT declaration and payment;
• Payment of corporate income tax (IS), payroll tax, economic and territorial contribution (CVAE and CFE), flat-rate tax on network companies (IFER) and property tax;
• Consultation of tax returns and company tax account ;
• Submission and follow-up of VAT credit claims ;
• Claim for refund of VAT incurred in a European Union country;
• Issuance of tax certificate required for public procurement ;
• Issuance of certificate of tax residence in France ;
• Income tax return for sole proprietors subject to the simplified BIC tax regime (form 2031).

Complementary procedures often require the transmission of elements in paper format, although the tax authorities are expected to converge towards a 100% digital declaration model.

Thanks to its digitalization efforts, a French company takes an average of 139 hours to complete its tax formalities each year, compared with 240 hours worldwide.

Above all, we need to pay close attention to all post-filing procedures. For example, VAT refund claims and tax audits following corrections to corporate income tax returns are not yet available in digital format.

As a result, the transmission of information can sometimes take more than six months.

"The digital transformation of the tax sector is a vector of trust and transparency. It helps recreate the link between the administration and businesses" PwC report, 2017

What's new for 2018?

2018 marks an important turning point in terms of digitalization.

Today, there are two modes of transmission:

• EFI (Electronic Forms Interchange) directly online via the subscriber area reserved for professionals;
• EDI (Electronic Data Interchange), which enables an authorized third party to transmit information to the tax authorities.

2018 is marked by preparations for the introduction of the prélèvement à la source (withholding tax) in January 2019. This will be a further opportunity to digitize procedures even further.

Since 2015, all companies subject to the normal or simplified real tax regime have been required to teletransmit their income tax returns and associated appendices, as well as their business value-added contribution returns.

The government platform démarches-simplifiées.fr was launched earlier this year by Secretary of State Mounir Mahjoubi to generate administrative forms more easily and respond to requests from individuals and businesses alike.

The government has announced its intention to achieve total dematerialization of business procedures by 2022.

The dematerialization of procedures is therefore a long process that France has been engaged in since the beginning of 2000. Now well placed in the European rankings, the promise ofinvestment in digital technology to achieve complete digitization of procedures by the end of the five-year term means that we can foresee major upheavals ahead for all businesses.

Adapting to the new challenges posed by dematerialization is not always easy, especially for SMEs with limited IT resources. 

For individuals, it is already compulsory to file their tax return online if their annual income exceeds €15,000. From 2019, the entire population will have to comply, even those not liable for tax.