Dispute with the tax administration: how to make a friendly appeal?

Verified 11 May 2023 - Legal and Administrative Information Directorate (Prime Minister)

In case of disagreement with the tax administration, several possibilities of recourse allow to find an amicable solution. The company can make an ex gratia appeal, request a tax transaction, request the departmental fiscal conciliator or the mediator of the economic and financial ministries. There are specific remedies in case of disagreement during a tax audit.

During a tax audit

In the event of disagreement with the tax administration during a tax audit, several amicable appeals may be made:

  • The hierarchical remedy allows you to speak to the auditor's supervisor.
  • The Ombudsman for Economic and Financial Ministries can find a solution when the hierarchical remedy has failed.
  • The transaction is a written contract that ends a dispute that has arisen.

Where the company encounters disagreements or difficulties with the tax administration during a tax audit, it may contact the supervisor of the officer responsible for the audit directly. It's the first-level recourse. If discrepancies remain, a second-level appeal can be made.

First-level hierarchical redress

The first-level management appeal shall be addressed to the supervisors of the Supervisor by post or by e-mail.

The names of the superiors of the auditor to whom the company may apply in the event of difficulties shall be indicated on the notice of verification or examination of the accounts. This is a divisional inspector or a principal inspector.

The tax audit of a company begins with the sending or delivery of an audit opinion or an accounting review opinion to the company.

Second-level hierarchical remedy

If any discrepancies remain after the divisional or principal inspector meeting, the company may contact the departmental contact.

The name and address of the departmental contact person shall appear on the audit notice or on the accounting examination notice.

FYI  

The hierarchical remedy exercised in the process of checking does not interrupt inspection operations.

Mediation is a way to find an amicable solution and avoid going to court.

The company must have first, to have made a hierarchical appeal before turning to the Ombudsman of the Economic and Financial Ministries.

The Ombudsman can be contacted in two ways:

Répondez aux questions successives et les réponses s’afficheront automatiquement

Online

The Ombudsman can be contacted directly on the Internet:

Request mediation from the Ombudsman of Economic and Financial Ministries

By mail

A simple letter should be sent to:

Ombudsman of Economic and Financial Ministries

BP 60153

14 010 CAEN cedex 1

The application shall include the following information:

  • Problem Description
  • References of the service concerned
  • Copy of the correspondence with the relevant administration
  • Contact details (address, and possibly telephone numbers).

What is a tax transaction?

The transaction allows a dispute or litigation to be amicably terminated. It involves reciprocal concessions by the company and the tax administration.

The company undertakes to pay the amount set at the end of the tax audit. It also waives all claims and appeals to the courts concerning the sums that were the subject of the transaction. In return, the tax authorities waive, in whole or in part, penalties, surcharges and interest for late payment.

Warning  

The transaction does not interrupt the payment requested by the tax authority. The company therefore has an interest in claiming payment periods.

How is the tax transaction going?

The transaction request must be made by the company to the company Tax Office (SIE).

Who shall I contact

Please note

In practice, the advisability of offering a tax transaction to the tax administration is examined by company lawyers.

The tax authority can accept or reject the transaction request:

  • Either she accept. It sends a proposal to the company in the form of a registered letter with acknowledgement of receipt. The company has a 30-day period from the date of receipt of the draft transaction to make known its acceptance or to notify its refusal.
  • Either she discard the transaction request. The administration's silence for more than 4 months also constitutes a rejection decision.

Once the transaction has been executed, it is no longer possible for the company to challenge the charges and penalties contained in the transaction before a judge.

Outside a tax audit

In case of difficulty concerning the calculation or payment of the tax, it is possible to make a ex gratia appeal to the tax authority to request a rebate.

Where the response of the tax administration is not satisfactory, the departmental fiscal conciliator may lead to an amicable solution.

If the dispute persists, the ombudsman for economic and financial ministries can then be solicited.

When to make an ex gratia appeal?

The ex gratia appeal (or ex gratia application) is made by a company in financial difficulties wishing to obtain from the tax administration:

  • One delivery, i.e. the waiver of all taxes (income tax, business tax, local taxes, etc.), fines, penalties or default interest
  • One moderation, i.e. the reduction of late charges or penalties or interest.

Only the final charges and penalties are concerned. This is the case when the time limits for complaints or appeals have expired or when there is no possible appeal against a court decision.

FYI  

It is not possible to ask for a remission of registration fees, stamp duty, property advertising tax, turnover tax.

How do I file an ex gratia appeal?

The ex gratia application shall be made in the form of simple letter the company tax service (SIE) on which the company depends.

Who shall I contact

This letter must contain the information necessary to identify the case concerned.

There's no no time-out condition to be complied with in order to lodge such an appeal.

Who makes the decision to grant the pardon?

The ex gratia decision shall be taken by one of the following persons, depending on the size of the sums applied for:

  • Departmental Director of Public Finance for a rebate or moderation request less than or equal to €200,000 by taxation year. The decision can be challenged before the minister responsible for the budget.
  • Minister responsible for the budget for a rebate or moderation request that exceeds €200,000 by taxation year.

If the tax authority does not respond in the two-month period, the application shall be deemed to have been rejected.

Warning  

No ex gratia remedy shall be available deferral of payment. This means that the tax administration can claim the payment of the tax despite the appeal.

The transaction occurs at the company's initiative who wishes to obtain a reduction in the penalties incurred. The transaction involves reciprocal concessions. The administration agrees to a mitigation of penalties imposed or incurred. The beneficiary company of the transaction undertakes to pay less than these penalties and waives all proceedings before the courts.

It concerns only tax fines, penalties which are not final steps. This means that the claim periods must always run.

It is therefore not possible to negotiate a tax transaction concerning principal taxes.

The transaction request must be made by the company to the company Tax Office (SIE).

Who shall I contact

Please note

In practice, the advisability of offering a tax transaction to the tax administration is examined by company lawyers.

The tax authority can accept or reject the transaction request.

  • Either she accept. It sends a proposal to the company in the form of a registered letter with acknowledgement of receipt. The company has a 30-day period from the date of receipt of the draft transaction to make known its acceptance or to notify its refusal.
  • Either she discard the transaction request. The administration's silence for more than 4 months also constitutes a rejection decision.

Once the transaction has been executed, it is no longer possible for the company to challenge the charges and penalties contained in the transaction before a judge.

When to contact the departmental fiscal conciliator?

The company must first contact the company Tax Office (SIE) on which it depends. If, after this initial step, she has not obtained satisfaction, she can contact the departmental tax conciliator.

The conciliator can provide a amicable solution in the following cases:

  • Disputes with tax authorities : rejection or partial admission of a complaint, rejection of an ex gratia request for the remittance of penalties, refusal of payment deadlines
  • Disputes concerning the quality of the service provided to the user and compliance with quality of service commitments by the tax authorities

The departmental fiscal conciliator has jurisdiction over all taxes (direct taxes, VAT, registration fees, local taxes, etc.) where they result from improvements linked to a documentary check.

The taxpayer's request is assessed on the basis of several criteria: the company's financial situation, the cooperative attitude during the audit, the isolated nature or otherwise of the infringement, and the more or less relevant justifications put forward.

However, the conciliator is not competent to treat the following:

  • Procedures for auditing accounts or reviewing personal tax situations
  • Checks on documents in progress, before the imposition of charges
  • Tax ruling procedure or transactional procedures
  • Land Advertising Disputes (Mortgage Retention)
  • Applications submitted to the President of the Republic, the Prime Minister, the Minister in charge of Finance, the Defender of Rights, parliamentarians and local elected representatives
How do I enter the departmental fiscal conciliator?

The company must send a letter or an e-mail setting out the history of the case, the points of contention and the solutions requested to the departmental fiscal conciliator.

Who shall I contact

The conciliator undertakes to answer within 30 days to inform of its decision or the status of the processing of the application for more complex files.

It may amend, if necessary, the decision initially taken by the service and thus ensure a speedy settlement of the dispute.

If the decision does not satisfy the company, it may refer the matter to the Ombudsman of the Economic and Financial Ministries.

Warning  

Entering the Departmental Tax Reconciler does not waive payment the sums claimed and does not interrupt time limits of contentious appeals.

The company must have previously contacted the departmental fiscal conciliator or the companies' tax department (SIE) before approaching the mediator of the economic and financial ministries.

It shall have jurisdiction in the event of a persistent dispute concerning the operation of the services of the ministry of finance in its relations with users. It cannot intervene when a tax control procedure is under way

The Ombudsman can be contacted in two ways:

Répondez aux questions successives et les réponses s’afficheront automatiquement

Online

The Ombudsman can be contacted directly on the Internet:

Request mediation from the Ombudsman of Economic and Financial Ministries

By mail

A simple letter should be sent to:

Ombudsman of Economic and Financial Ministries

BP 60153

14 010 CAEN cedex 1

The application shall include the following information:

  • Problem Description
  • References of the service concerned
  • Copy of the correspondence with the relevant administration
  • Contact details (address, and possibly telephone numbers).

Please note

The Defender of Rights can also be seized to resolve a problem with an administration.

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