Late Tax Payments: What Are the Consequences?
Missed a tax deadline or paid your taxes late? This oversight can result in financial penalties. But what exactly are the consequences, and what can you do if you’re facing financial hardship? Here’s what you need to know.
What Does “Late Tax Payment” Mean?
Regardless of whether your business is subject to corporate tax (IS) or personal income tax (IR), you are legally required to file and pay taxes on time. Failing to meet deadlines can lead to penalties.
A late payment refers to a situation where a tax debt is not paid in full by the legally defined due date. This includes partial payments, delayed payments, or complete non-payment.
Important Note
If you’ve made a genuine mistake or omission on time, France’s “right to make an error” may allow you to correct it without penalty.
However, this right does not apply to late filings, delayed payments, or intentional misreporting.
What Penalties Apply for Late Tax Payments?
10% Penalty for Late Payment
Under Article 1730 of the French General Tax Code, a 10% surcharge applies to overdue tax payments. This applies to several taxes, including:
Personal income tax
Social contributions
Secondary residence housing tax
Property tax
Real estate wealth tax (IFI)
This 10% penalty is triggered if:
Payment isn’t made within 45 days of the tax being formally assessed
An installment is missed and remains unpaid after the 15th of the following month
5% Penalty in Specific Cases
In some cases, Article 1731 provides for a 5% penalty on late payments for certain taxes, unless otherwise specified.
Financial Hardship: What Are Your Options?
If you’re experiencing temporary or exceptional financial difficulties, you may request a payment deferral or installment plan. This request must be submitted by the taxpayer—either the business owner or the legal representative—to their local Public Finances Office.
In more severe cases, where taxpayers are genuinely unable to pay, it may be possible to apply for a tax reduction. These are granted on a case-by-case basis, typically to those in significant financial distress.
Late Interest Charges Apply Too
Unless explicitly waived, interest on late payments is added on top of penalties.
The current interest rate is 0.20% per month, or 2.4% annually.
