Late Payment of Taxes: What Are the Risks for Your Business?

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Did you forget to pay your taxes or settle them after the deadline? Late payment can lead to financial penalties. How much could it cost? And what options are available if you’re facing financial hardship? Here’s a clear overview.

What Is Considered a Late Tax Payment?

Regardless of whether your company is taxed under corporate income tax (IS) or personal income tax (IR), you are legally required to file and pay your taxes on time. Any delay in payment constitutes a tax violation and triggers penalties.

A late payment occurs when a tax liability is not fully paid by the statutory deadline. This includes missed payments, partial payments, or payments made after the due date.

Good to Know

If you’ve made a mistake or omission in your tax return but submitted it on time, you may benefit from the “right to make an error,” allowing you to correct it without penalty. However, this right does not apply to late filings, overdue payments, or intentional inaccuracies.

What Penalties Apply to Late Tax Payments?

A 10% Surcharge

Under Article 1730 of the French General Tax Code (CGI), a 10% surcharge is added when taxes are not paid on time. This applies to several types of taxes, including:

  • Personal income tax

  • Social contributions

  • Property tax on second homes

  • Real estate wealth tax (IFI)

The 10% penalty applies in the following cases:

  • When the tax is not paid within 45 days after the official notice of collection

  • When installments are not paid by the 15th of the month following their due date

A 5% Penalty

For certain taxes, Article 1731 of the CGI imposes a reduced 5% penalty, unless specific exemptions apply.

Additional Charges: Late Payment Interest

Unless otherwise specified by law, late payment interest is added to any surcharges.

This interest accrues at a monthly rate of 0.20%, which equals 2.4% annually.

What If You’re Struggling to Pay?

If you’re facing temporary or exceptional financial difficulties, you can request a payment extension to spread your tax debt over time.

This request must be made by the taxpayer—either a sole proprietor or the legal representative of a company—to their local Public Finance Center.

In extreme cases, where you’re unable to settle your taxes even with a payment plan, you may be eligible for a tax relief request. These are granted under strict conditions and reserved for those in serious financial distress.

Learn more about payment difficulties on the official tax website.