Excellent accompagnement de Maître Uzan. Très professionnel, disponible et clair dans ses conseils, notamment pour ma première déclaration fiscale en France après de nombreuses années à l'étranger. Dossier parfaitement suivi. Je recommande vivement.
Tax Reassessment
Tax reassessment: consequences, penalties and how to challenge it (30-day deadlines, surcharges under article 1729 CGI)
Tax lawyer in Paris – 20 years of expertise in tax reassessments and tax litigation
In brief
- Response deadline: 30 days from receipt of the NPR (proposed tax reassessment notice) (+ 30 additional days on request).
- Possible penalties: Late-payment interest of 0.20% per month + surcharges of 10%, 40% or 80% depending on the degree of seriousness.
- Reassessment periods: 3 years in principle, 10 years in the case of undeclared activity or undeclared foreign accounts.
- Tax lawyer: checks that the procedure is lawful, prepares your observations, negotiates or argues your case in court.
What is a proposed tax reassessment and how long do you have to act?
- Mandatory document prior to reassessment: The NPR (notification de proposition de rectification – proposed tax reassessment notice) is sent by registered mail. It details the proposed adjustments, their legal basis and the amount claimed.
- Strict response deadlines: You have 30 days to respond, which can be extended only once by an additional 30 days on simple request. After this deadline, the tax authorities may treat your silence as tacit acceptance.
- Broad scope: The NPR may concern income tax, IFI (real estate wealth tax), VAT or transfer duties.
How do you respond to a proposed tax reassessment in 5 steps to reduce or cancel the reassessment?
- Read each contested point carefully: identify the adjustments line by line (amount, legal basis).
- Gather evidence: invoices, contracts, bank statements, correspondence... any document useful for your defense.
- Check the procedure: check that the Taxpayer's Charter (Charte du contribuable) was provided, that the reasoning complies with article L.57 of the French Tax Procedure Code (LPF) and that the audit period has been respected.
- Draft your adversarial observations: set out the facts, develop your legal arguments, attach the evidence and request an extension if necessary.
- Send your response by registered letter with acknowledgment of receipt (LRAR): keep a paper and digital copy + the acknowledgment of receipt.
What surcharges and interest can be applied and how can they be mitigated?
| Reason | Surcharge | Interest | Reassessment period | Defense strategy |
|---|---|---|---|---|
| Late filing | 10% | 0.20%/month | 3 years | Voluntary payment, request for discretionary remission |
| Bad faith | 40% | 0.20%/month | 3 years | Prove an error or an ambiguity |
| Fraudulent maneuvers | 80% | 0.20%/month | 6 or 10 years | Challenge the classification as fraud or abuse of law |
What is the litigation process if the tax authorities maintain the reassessment?
- Notice of collection (avis de mise en recouvrement – AMR): it is issued if your observations are rejected, in part or in full.
- Mandatory prior claim: you must challenge the AMR by means of a formal tax claim (réclamation contentieuse) before December 31 of the 2nd year following the assessment.
- Silence from the tax authorities = implicit rejection: after 6 months without a response, you may bring the matter before the administrative court.
- Remedies: appeal, then the Council of State (Conseil d'État), within 2 months of the decision.
- Stay of payment: LPF L.277 allows payment to be suspended subject to guarantees.
Why entrust your defense to a tax lawyer from the adversarial phase onwards?
- Detection of procedural defects: a lawyer identifies irregularities (lack of reasoning, missed deadline, charter not provided) that can lead to the reassessment being cancelled.
- Negotiation with the tax authorities: they can obtain a reduction or waiver of surcharges (40% reduced to 10%, or even to 0%).
- Cash flow preserved: the lawyer requests a stay of payment and limits the guarantees required.
- Strategic litigation: they build a solid case, draft the claim and argue it before the court. They can also initiate a settlement (transaction) under LPF L.247.
The 8 stages of a tax reassessment
- Audit notice (desk audit or field audit).
- Proposed tax reassessment notice (NPR).
- Adversarial response within 30 days (extendable).
- Response from the tax authorities.
- Notice of collection (AMR).
- Formal tax claim before December 31 of year N+2.
- Implicit or explicit response after 6 months.
- Legal action before the administrative court.
FAQ
Why do the tax authorities apply a 40% surcharge for bad faith and how can it be challenged?
The 40% surcharge is provided for by article 1729 of the CGI when it is shown that the taxpayer deliberately evaded tax. It requires deliberate intent, which the tax authorities must prove.
It is therefore possible to challenge this surcharge by demonstrating a good-faith error, a misinterpretation of the tax rules or unintentional negligence. Being assisted by a lawyer often makes it possible to obtain a reduction to 10% or complete cancellation.
How do I actually request the additional 30-day period to respond to my NPR?
Simply send a written request to the tax authorities within the initial 30-day period following receipt of the NPR. This request is granted as of right and does not need to be justified. It can be sent by ordinary letter or email to the inspector, but it is recommended to send it by registered letter with acknowledgment of receipt to keep proof of the request.
This additional period can only be granted once.
What should I do if I receive a formal notice to pay while my claim is still pending?
You can request a stay of payment from the public accountant under article L.277 of the LPF. This stay suspends collection proceedings while your claim is being examined.
You will have to provide guarantees (mortgage, surety, etc.) up to the amounts contested. If the stay is refused or the guarantees are deemed insufficient, you can apply to the interim relief judge within 15 days (LPF, article L.279).
Glossary
- NPR: Notification de Proposition de Rectification (proposed tax reassessment notice)
- AMR: Avis de Mise en Recouvrement (notice of collection)
- LPF: Livre des Procédures Fiscales (French Tax Procedure Code)
- 40% surcharge: penalty for bad faith
- Reassessment period: the period during which the tax authorities can issue a reassessment
Case study
You receive an NPR with a reassessment of €4,000 on your 2021 income
- You have 30 days to respond (or request an extension).
- You gather your supporting documents and send your observations.
- If the tax authorities confirm the reassessment, you have until 12/31/2024 to file a claim.
- You can request a stay of payment if a challenge is pending.
Further reading
The proposed tax reassessment must set out the legal and factual grounds for each proposed adjustment. If the reasoning is incomplete, imprecise or missing, the procedure may be cancelled for a formal defect.
- Reference: LPF L.57
Article 1729 of the French General Tax Code (Code général des impôts – CGI)
This article sets the rates of surcharges in the event of a failure:
- 10% for late filing (CGI, article 1728)
- 40% for established bad faith
- 80% in the event of fraudulent maneuvers or abuse of law
The burden of proof lies with the tax authorities for the heaviest penalties.
- Reference: CGI art. 1728 and 1729 – BOFiP BOI-CF-INF-10-20-10 and BOI-CF-INF-10-20-20
