You live in London, New York, Dubai or Singapore. Your French company — usually a SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders choose) or a SARL (société à responsabilité limitée, the closed limited-liability company) — runs its daily business in France through an accountant, a local director or a management company. Then an envelope or a message in your professional account on impots.gouv.fr (the French tax authority portal) announces a vérification de comptabilité (on-site audit of your accounts) for financial years 2022 to 2024. The letter comes from the SIE (service des impôts des entreprises, the local corporate tax office) and is signed by the DGFiP (Direction générale des Finances publiques, the French tax administration). Panic follows: do you have to fly to France, hand over everything, accept the reassessment? No. French tax audits follow a strict contradictory procedure with written notices, fixed reply periods, an oral discussion guarantee and several levels of appeal, and every step can be handled from abroad through a representative, your accountant and your secure online account. This guide explains, for a foreign shareholder or director who does not live in France, what the auditor is allowed to do inside your company, which papers to prepare, how to answer the proposition de rectification (the formal notice of proposed reassessment), how interest and penalties are calculated, and how to challenge the final bill before the tax judge without relocating to France. It assumes your company is properly registered — with a Kbis (the official company identity certificate issued by the greffe, the registry of the commercial court) and published notices in the BODACC (Bulletin officiel des annonces civiles et commerciales, the official gazette for company registrations) — as described in our founders guide to setting up a company in France as a foreign founder, and it focuses on the DGFiP corporate audit, which is entirely separate from an URSSAF (unions de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the social-security collection agency) payroll audit.

I. The audit notice has arrived: what the French tax auditor is allowed to do inside your company

A. How a vérification de comptabilité starts when you live abroad

Nothing can start without a written avis de vérification (formal audit notice). Article L. 47 of the Livre des procédures fiscales (the French tax procedure code) provides: “Un examen contradictoire de la situation fiscale personnelle d’une personne physique au regard de l’impôt sur le revenu, une vérification de comptabilité ou un examen de comptabilité ne peut être engagé sans que le contribuable en ait été informé par l’envoi ou la remise d’un avis de vérification ou par l’envoi d’un avis d’examen de comptabilité.” In plain English: no audit without prior notice, except for a surprise visit limited to recording physical facts, in which case the notice and the charter are handed over at the start. The same article adds: “Cet avis doit préciser les années soumises à vérification et mentionner expressément, sous peine de nullité de la procédure, que le contribuable a la faculté de se faire assister par un conseil de son choix.” If the notice does not list the audited years or does not expressly mention your right to be assisted by counsel of your choice, the whole procedure can be annulled. The notice also tells you that the charte des droits et obligations du contribuable vérifié (the charter of rights and duties of the audited taxpayer) is available on the tax authority website or on request. Read it immediately: it summarises every deadline described below.

The Paris administrative court of appeal applied this strictly. In CAA Paris, 10 October 2018, No. 17PA03542, concerning a brokerage company and its 97.5% partner, the court recalled: “aux termes de l’article L. 47 du livre des procédures fiscales : ” Un examen contradictoire de la situation fiscale personnelle d’une personne physique au regard de l’impôt sur le revenu ou une vérification de comptabilité ne peut être engagée sans que le contribuable en ait été informé par l’envoi ou la remise d’un avis de vérification. Cet avis doit préciser les années soumises à vérification et mentionner expressément, sous peine de nullité de la procédure, que le contribuable a la faculté de se faire assister par un conseil de son choix “.” The administration had sent a first notice on 3 January 2014, received on 7 January, covering financial years closed in 2011 and 2012 with a first on-site visit scheduled for 20 January, then a second identical notice when the company asked for the audit to take place at its accountant’s office. Because both notices stated the object, the period and the date of the first visit, and both mentioned the right to counsel, the procedure survived. The lesson for a foreign owner is practical: check the dates, the years, the address of the first visit and the counsel paragraph the day you receive the letter, and forward it the same day to your French accountant and lawyer. If anything is missing, do not ignore the audit — raise the defect in writing later — but keep the proof.

Where does the audit take place when you are not in France? Article L. 13 of the Livre des procédures fiscales states: “Les agents de l’administration des impôts vérifient sur place, en suivant les règles prévues par le présent livre, la comptabilité des contribuables astreints à tenir et à présenter des documents comptables.” The check is on site as a rule, but it can be held elsewhere by agreement, and the administration can decide to continue it in its own offices if there is no agreement. For a company run from abroad, the standard solution is to ask in writing that the audit take place at the office of your expert-comptable (chartered accountant), who holds the books, and to give that accountant a written mandate to answer factual questions and produce documents. The auditor cannot refuse to deal with your accountant, your lawyer or your authorised employee. You do not need to be physically present at each visit. What you must organise from abroad is access: accounting files (the FEC, fichier des écritures comptables, the standard electronic accounting file the auditor will request), invoices, bank statements, contracts with the foreign parent, payroll records, VAT returns (CA3), corporate income tax returns (IS, impôt sur les sociétés), and the DAC/transfer-pricing file if the French company deals with related foreign entities. Keep everything in the professional impots.gouv.fr account and in a shared folder your representative can show on screen.

How long can the auditor stay? For small companies, the on-site work is capped. Article L. 52 of the Livre des procédures fiscales provides: “Sous peine de nullité de l’imposition, la vérification sur place des livres ou documents comptables ne peut s’étendre sur une durée supérieure à trois mois en ce qui concerne : 1° Les entreprises industrielles et commerciales ou les contribuables se livrant à une activité non commerciale dont le chiffre d’affaires ou le montant annuel des recettes brutes n’excède pas les seuils prévus aux 1° et 2° de l’article L. 162-4 du code des impositions sur les biens et services”. For most foreign-owned French subsidiaries and small operating companies, on-site verification cannot exceed three months, under penalty of nullity of the assessment. The clock covers verification on your premises, not the later office work of drafting the reassessment. Extensions exist in defined cases, but the starting point matters: note the date of the first on-site visit and the date the auditor leaves your accountant’s office. If the auditor announces an examen de comptabilité (remote desk review of accounts from the office, introduced as an alternative to the on-site audit) instead of a vérification de comptabilité, the same notice rule applies and the exchange is written, which is often easier from abroad but leaves less room for oral explanation — answer in structured French memos with exhibits.

Two protections close this opening phase. First, Article L. 51 of the Livre des procédures fiscales bars a second audit of the same books for the same taxes and period once a vérification or examen for that period and tax is closed: “Lorsque la vérification de comptabilité ou l’examen de comptabilité, pour une période déterminée, au regard d’un impôt ou d’une taxe ou d’un groupe d’impôts ou de taxes, est achevé, l’administration ne peut procéder à une vérification de comptabilité ou à un examen de comptabilité de ces mêmes écritures au regard des mêmes impôts ou taxes et pour la même période.” Exceptions exist for audits limited to specific transactions, for VAT under Article L. 176, for fraud under Article L. 187, and for flagrance fiscale (a formal report of flagrant tax fraud drawn up on the spot). Second, time limits protect you: Article L. 169 of the Livre des procédures fiscales states: “Pour l’impôt sur le revenu et l’impôt sur les sociétés, le droit de reprise de l’administration des impôts s’exerce jusqu’à la fin de la troisième année qui suit celle au titre de laquelle l’imposition est due.” For corporate income tax, the administration generally has until 31 December of the third year after the tax year to reassess, extended to ten years for hidden activity or distributed income from a hidden activity. For VAT, Article L. 176 of the Livre des procédures fiscales mirrors this: “Pour les taxes sur le chiffre d’affaires, le droit de reprise de l’administration s’exerce jusqu’à la fin de la troisième année suivant celle au cours de laquelle la taxe est devenue exigible conformément aux dispositions du 2 de l’ article 269 du code général des impôts.” When you receive the notice, ask your accountant immediately which years are still open and whether any prior audit already covered them. An auditor who strays beyond the notified years or the open limitation period must be reminded in writing, politely but firmly, with the article numbers.

B. Your guarantees while the auditor works: oral discussion, documents and the closing meeting

The centrepiece guarantee is the débat oral et contradictoire (the right to an oral, adversarial discussion with the auditor during the on-site work). The statute implies it, the charter describes it, and the courts enforce its absence as a ground for discharge when the company was genuinely deprived of any exchange. The Lyon court of appeal set the test clearly in CAA Lyon, 14 October 2021, No. 19LY02326, a VAT-on-margin case after an audit from 21 November 2014 to 4 December 2015. The court held: “Dans le cas où la vérification de la comptabilité d’une société commerciale a été effectuée, soit, comme il est de règle, dans ses propres locaux, soit, si son dirigeant ou représentant l’a expressément demandé, dans les locaux du comptable auprès duquel sont déposés les documents comptables, il appartient au contribuable qui allègue que les opérations de vérification ont été conduites sans qu’il ait eu la possibilité d’avoir un débat oral et contradictoire avec le vérificateur, de justifier que ce dernier se serait refusé à un tel débat, soit avec les mandataires sociaux, soit avec leurs conseils, préposés ou mandataires de droit ou de fait.” In that case the manager had asked for the audit at the accountant’s office and authorised Ms B. A., accountant, to answer questions and produce documents. The court continued: “Il n’est pas allégué que le vérificateur se serait refusé à tout échange de vues avec l’expert-comptable désigné pour représenter la société au cours des opérations de contrôle. Dans ces conditions, la seule circonstance, à la supposer établie, que le gérant de la SARL le Taburle n’aurait pas été informé des dates des réunions entre le vérificateur et la représentante désignée et qu’il n’a été présent que lors la première intervention du 21 novembre 2014 et de la dernière réunion de synthèse du 18 décembre 2015 au cours de laquelle ont été présentés les rappels envisagés ne suffit pas à établir que la vérification de comptabilité a été conduite dans des conditions n’ayant pas offert à la SARL Le Taburle la possibilité d’un débat oral et contradictoire. Le moyen tiré de ce qu’elle a été privée de cette garantie doit dès lors être écarté.” For a foreign owner, the message is direct: appoint a representative, keep a log of visits, questions and answers, and insist on a réunion de synthèse (closing discussion meeting) where the auditor presents the adjustments under consideration. If the auditor refuses any oral exchange with your manager, accountant or lawyer, write immediately to record the refusal. If the auditor does exchange with your accountant, you cannot later claim you were deprived of debate merely because you stayed abroad.

Documents obtained from third parties must also be debated. In the same Lyon case the company complained that papers sent by German and Romanian authorities under international administrative assistance had not been submitted to oral discussion, especially at the synthesis meeting, and that disclosure on request came after the extended reply period. The court examined whether the documents were actually used to support the reassessment and whether the company could discuss them. The practical point for groups with cross-border flows is to ask, at the synthesis meeting and in writing: which external information will support any adjustment, and when will it be disclosed? French procedure has a specific safeguard in Article L. 76 B of the procedure code for documents obtained from third parties: the administration must inform you of their origin and content and make them available before the reassessment becomes final, so you can ask for them in time to answer. Do not wait for the reassessment to discover a foreign tax authority email or a bank reply. Request access during the audit, list the request in an email, and keep the tracking.

End the fieldwork cleanly. Ask for a written inventory of documents taken or copied, the FEC receipt, and the minutes or email confirming the last on-site day for the L. 52 three-month calculation. If the auditor announces no adjustment, you should receive an avis d’absence de rectification (notice that no reassessment will follow). If adjustments are envisaged, nothing is final yet: the next document, the proposition de rectification, opens the real written debate. From abroad, the worst mistake is silence between the last visit and that letter. Use the interval to reconcile the points raised orally, gather missing invoices, correct the FEC errors your accountant spotted, and prepare the 30-day answer described below. If cash is tight, start modelling the cost: principal, late interest and the penalty rates, so the reply can also request mitigation where the law allows it.

II. The reassessment arrives: answer within the deadline and challenge the bill from abroad

A. How to answer the proposition de rectification within 30 days and keep every appeal open

The proposition de rectification is the decisive letter. Article L. 57 of the Livre des procédures fiscales provides: “L’administration adresse au contribuable une proposition de rectification qui doit être motivée de manière à lui permettre de formuler ses observations ou de faire connaître son acceptation.” The notice must be reasoned enough for you to understand the nature and reasons for each adjustment and to reply or accept. It must state the tax, the years, the amounts, the legal basis and the facts. A vague reference to “accounting anomalies” without figures, method and legal articles is vulnerable. The same article adds: “Sur demande du contribuable reçue par l’administration avant l’expiration du délai mentionné à l’article L. 11 , ce délai est prorogé de trente jours.” You can double your time by asking before the first deadline expires.

How long is that first deadline? Article L. 11 of the Livre des procédures fiscales provides: “A moins qu’un délai ne soit prévu par le présent livre, le délai accordé aux contribuables pour répondre aux demandes de renseignements, de justifications ou d’éclaircissements et, d’une manière générale, à toute notification émanant d’un agent de l’administration des impôts est fixé à trente jours à compter de la réception de cette notification.” The Conseil d’État combined these texts in CE, 21 December 2022, No. 462224: “Aux termes de l’article L. 57 du livre des procédures fiscales : ” L’administration adresse au contribuable une proposition de rectification qui doit être motivée de manière à lui permettre de formuler ses observations ou de faire connaître son acceptation. / Sur demande du contribuable reçue par l’administration avant l’expiration du délai mentionné à l’article L. 11, ce délai est prorogé de trente jours (…) “. L’article L. 11 du même livre dispose : ” A moins qu’un délai plus long ne soit prévu par le présent livre, le délai accordé aux contribuables pour répondre aux demandes de renseignements, de justifications ou d’éclaircissements et, d’une manière générale, à toute notification émanant d’un agent de l’administration des impôts est fixé à trente jours à compter de la réception de cette notification “.” The court drew the consequence: “Il résulte de ces dispositions qu’un contribuable dispose d’un délai franc de trente jours pour faire connaître ses observations sur la proposition de rectification et que la durée de ce délai peut être portée à soixante jours à sa demande.” You have a full 30 days from receipt, extendable to 60 days on request made before expiry. In that case the court noted: “La cour a relevé que les propositions de rectification des 12 et 17 juin 2013 avaient été notifiées à M. A… le 19 juin suivant et que l’administration fiscale avait pris acte le 11 juillet de sa demande de prorogation du délai dont il disposait pour présenter ses observations en application des dispositions citées au point 2.” The request of 11 July, made before expiry, was effective even though the court made a clerical error about June and August dates. From abroad, send the extension request immediately by registered letter with acknowledgment (LRAR, lettre recommandée avec accusé de réception) and through the secure messaging of your professional account, before day 30, and keep both receipts. Then use the extra 30 days to build a line-by-line answer, not a general protest.

What procedure applies? Article L. 55 of the Livre des procédures fiscales states: “Sous réserve des dispositions de l’article L. 56, lorsque l’administration des impôts constate une insuffisance, une inexactitude, une omission ou une dissimulation dans les éléments servant de base au calcul des impôts, droits, taxes, redevances ou sommes quelconques dues en vertu du code général des impôts ou de l’article L. 2333-55-2 du code général des collectivités territoriales, les rectifications correspondantes sont effectuées suivant la procédure de rectification contradictoire définie aux articles L. 57 à L. 61 A.” Most DGFiP audits of a French subsidiary follow this contradictory rectification track (Articles L. 57 to L. 61 A), not an automatic taxation. That matters because you keep the right to be heard, to see the reasons, and to seize a commission. Article L. 59 of the Livre des procédures fiscales provides: “Lorsque le désaccord persiste sur les rectifications notifiées, l’administration, si le contribuable le demande, soumet le litige à l’avis soit de la commission des impôts directs et des taxes sur le chiffre d’affaires prévue à l’article 1651 du code général des impôts, soit de la Commission nationale des impôts directs et des taxes sur le chiffre d’affaires prévue à l’article 1651 H du même code, soit de la Commission nationale des taxes aéronautiques prévue à l’article 1651 L bis du même code, soit du comité consultatif prévu à l’article 1653 F du même code, soit de la commission départementale de conciliation prévue à l’article 667 du même code.” If disagreement persists, ask for the relevant commission or committee. It gives a reasoned opinion, suspends nothing by itself, but often narrows the dispute and creates a record the judge will read. Your reply should therefore end with three explicit requests where appropriate: acceptance of certain points, reasoned rejection of others, and referral to the commission for the remaining items, plus a request for the documents obtained from third parties.

Price the risk correctly. Article 1727 of the Code général des impôts (the French tax code) states: “I. – Toute créance de nature fiscale, dont l’établissement ou le recouvrement incombe aux administrations fiscales, qui n’a pas été acquittée dans le délai légal donne lieu au versement d’un intérêt de retard.” Late interest runs on any tax paid late, currently at a statutory monthly rate set by law, plus penalties where applicable. Late filing triggers Article 1728 of the Code général des impôts: “Le défaut de production dans les délais prescrits d’une déclaration ou d’un acte comportant l’indication d’éléments à retenir pour l’assiette ou la liquidation de l’impôt entraîne l’application, sur le montant des droits mis à la charge du contribuable ou résultant de la déclaration ou de l’acte déposé tardivement, d’une majoration de : a. 10 % en l’absence de mise en demeure ou en cas de dépôt de la déclaration ou de l’acte dans les trente jours suivant la réception d’une mise en demeure d’avoir à le produire dans ce délai ; b. 40 % lorsque la déclaration ou l’acte n’a pas été déposé dans les trente jours suivant la réception d’une mise en demeure d’avoir à le produire dans ce délai ; c. 80 % en cas de découverte d’une activité occulte”. Inaccuracies in a return trigger Article 1729 of the Code général des impôts: “Les inexactitudes ou les omissions relevées dans une déclaration ou un acte comportant l’indication d’éléments à retenir pour l’assiette ou la liquidation de l’impôt ainsi que la restitution d’une créance de nature fiscale dont le versement a été indûment obtenu de l’Etat entraînent l’application d’une majoration de : a. 40 % en cas de manquement délibéré ; b. 80 % en cas d’abus de droit au sens de l’ article L. 64 du livre des procédures fiscales”. Deliberate failure means the administration must show you knowingly misled it; the Lyon case above kept a 40% deliberate-failure surcharge on VAT where the company knew the margin scheme did not apply. Fraudulent manoeuvres, abuse of rights and concealment of part of a price push the rate to 80%. Your 30/60-day answer should therefore attack the penalty separately: good-faith error, first-time misunderstanding of French VAT margin rules, reliance on the accountant, spontaneous regularisation during the audit (the BOFiP, Bulletin officiel des finances publiques, the administration’s published doctrine, allows reduced penalties for correction during inspection under conditions). Ask expressly for remission of penalties and for the benefit of any regularisation procedure, with figures. The impots.gouv.fr page on remedies during inspection confirms that several appeal paths (senior interviewer, departmental interlocutor, commissions) remain open while the procedure runs; use them in writing and keep the official page printout with your file.

B. How to challenge the final tax bill from abroad without losing by default

After your observations (and any commission opinion), the administration confirms, reduces or abandons each adjustment, then issues an avis de mise en recouvrement (collection notice) for the final tax, interest and penalties. From that moment a new clock starts: the réclamation contentieuse (formal administrative claim). File it from abroad through your professional account and by LRAR to the competent SIE or to the address on the notice, attaching the notice, the proposition, your reply, the commission opinion and every exhibit. State precisely the tax, years, amounts, legal grounds (procedure, limitation, facts, law, penalties) and the discharge or reduction you seek. If the claim is rejected expressly or implicitly after six months, you can go to the tribunal administratif (administrative court) of the place of taxation, then to the CAA and, on points of law, to the Conseil d’État. Deadlines are strict and counted from receipt, not from your next trip to France. Give your French lawyer a standing mandate and an email address for e-notifications, and calendar every date in both Paris time and your local time.

Do you have to pay first? As a rule, a claim does not suspend collection, but you can request the sursis de paiement (deferral of payment while the dispute runs) by asking expressly in the claim and, where the amount exceeds the statutory threshold, by providing guarantees (bank guarantee, mortgage, cash deposit). Without a deferral request and guarantees, the accountant can enforce. With them, enforcement is suspended until the decision, in exchange for the guarantee. From abroad, arrange the guarantee early with your French bank: the bank that holds the company account, once opened after the capital deposit and Kbis stage, can issue the guarantee faster than a foreign bank. If cash flow is the issue, ask simultaneously for a plan de règlement (payment plan) for the undisputed part and a deferral for the disputed part. Never let the undisputed part drift: paying what you accept strengthens credibility for what you contest.

Build the court file around four blocks the French tax judge expects. First, procedure: missing or defective audit notice under L. 47, overrun of the L. 52 three-month on-site period for small companies, denial of oral discussion (with your visit log and refusal letters), unmotivated proposition under L. 57, late disclosure of third-party documents, second audit barred by L. 51, expired L. 169/L. 176 limitation. Second, facts: FEC extracts, invoices, bank proofs, contracts, timesheets, VAT and IS returns, proof that the margin scheme, the intra-group fee or the deducted provision was justified. Third, law: the CGI article actually applied, the BOFiP paragraph in force at the time, and the treaty article if a foreign parent, supplier or customer is involved. Fourth, penalties: why 40% or 80% is unfounded, with good-faith evidence and any spontaneous correction. The Lyon and Paris decisions above show how judges work: they quote the article, check the notice and the minutes, then decide point by point. A foreign owner who produces a dated, paginated, French-language file with a one-page summary table per tax year wins attention. A file of unsorted English emails does not.

Close with practical organisation from abroad. Designate one French contact point (accountant or lawyer) with authority to receive mail, upload to impots.gouv.fr and alert you within 24 hours. Centralise the Kbis, the articles of association, the RBE (registre des bénéficiaires effectifs, the beneficial-owners register filed at the greffe), leases, loan agreements, intercompany agreements and the last three tax packs in a bilingual index. Log every procedural date: notice receipt, first visit, last on-site day, proposition receipt, extension request, observations, commission referral, collection notice, claim, court filing. Diarise the French limitation dates (31 December of year N+3 for IS and VAT as a rule) and the 30/60-day reply windows. Keep translations short and certified where the judge needs them, but always file the French original. And keep the business running: an audit is not a ban on trading, hiring or investing. Companies that answer fast, pay what is due and contest what is debatable come out with a bounded bill and a cleaner file for the next three years.

Conclusion

A DGFiP audit of your French company is a coded exchange, not a verdict. The notice must name the years and your right to counsel or it risks nullity. The on-site work for most small companies cannot exceed three months and must include a real oral discussion with you or your appointed representative. The proposition must explain each adjustment so you can answer, and you have a full 30 days, extendable to 60 on timely request, to accept, rebut and seek the commission. Interest runs on late tax, 10/40/80% surcharges punish late filing and 40/80% punish inaccuracies, but each penalty must be proven and can be debated. After the collection notice, a reasoned claim, a properly guaranteed deferral request and, if needed, a structured case before the administrative court let you defend from London, New York or Singapore without flying in for every letter. Start today by checking the notice against Article L. 47, mandating your accountant, requesting the extension in time, and building the four-block file the judge expects. Handled this way, a tax audit becomes a finite dispute about defined years and amounts — not an open-ended threat to your French business.

Need a quick opinion on your case

For a focused review of your audit notice, proposition de rectification, deadlines and evidence, you can schedule a telephone consultation within 48 hours with a lawyer from the firm. Telephone consultation: 80 EUR TTC. Call +33 6 46 60 58 22 or write via our contact page with your Kbis, your last returns and the notice you received.