Tax regularisation lawyer in Paris: correct before the audit and measure the real cost.

A spontaneous tax regularisation consists of filing a rectifying return of one's own accord, accompanied by payment of the tax, before the tax authorities act on the tax concerned. The taxpayer thus corrects forgotten income, an understated base, an unjustified deduction or an omitted asset.

Article 1727 of the CGI attaches to this step a 50% reduction of the late-payment interest, on three conditions: filing before the reassessment period expires, a regularisation that does not concern an infringement incompatible with good faith, and payment of the basic tax. Administrative doctrine specifies that the filing is spontaneous where it precedes any act by the tax office, that is, a formal notice, a notice of audit or of review of personal tax situation, a request for information or a reassessment proposal (BOI-DAE-20-10, § 20).

The same doctrine accepts that a rectifying return filed after such an act remains spontaneous where it concerns a tax different from the one targeted by the tax office (§ 30). Spontaneity is therefore assessed tax by tax, not globally. It is not a certificate of good faith: the surcharge for deliberate failure follows its own criteria, examined below.

The cost is made up first of the basic tax, that is, the tax that should have been paid. To this is added late-payment interest at the rate of 0.20% per month, calculated in principle, for income tax, from 1 July of the year following the tax year, except notably for the real estate capital gains of articles 150 U to 150 UC (article 1727 of the General Tax Code). In case of a successful spontaneous regularisation, this interest is halved, that is 0.10% per month for interest accrued since 1 January 2018 (BOI-DAE-20-10, § 90).

Administrative doctrine ends the count at the end of the month in which the rectifying return is filed (BOI-CF-INF-10-10-20, § 120). The Paris administrative court of appeal applied this doctrine in favour of taxpayers who had filed a rectifying return, while upholding the surcharge for deliberate failure (CAA Paris, 18 November 2020, No. 19PA00074).

The surcharges are added where applicable: 10% for a return filed late without a formal notice, 40% for deliberate failure, 80% for fraudulent manoeuvres or, where the tax office reassesses tax linked to an undeclared foreign account, under article 1729-0 A. The full calculation is therefore made year by year, tax by tax, before any decision to file. A simulation that takes only the reduced interest into account understates the cost where the omission risks being characterised as deliberate: the surcharge is then added and late-payment interest becomes due again at the full rate.

Where its conditions are met, the reduction applies without any particular request from the taxpayer (BOI-DAE-20-10, § 10). According to the same doctrine, it benefits taxpayers who filed their initial return and paid the corresponding tax on time. It then requires a spontaneous correction, an error made in good faith and payment of the tax at the time of filing, or at the latest by the deadline shown on the tax assessment notice for taxes collected by roll (article 1727 of the General Tax Code).

Good faith is presumed: the tax authorities can refuse the reduction only if they establish that the omissions corrected were deliberate (§ 60). Payment, however, is the taxpayer's responsibility. A taxpayer who cannot pay immediately keeps the reduction if the public accountant grants a payment plan, to be requested at the time of filing (§ 70).

If only part of the tax is paid on filing and no plan is granted, the reduction applies only to the interest on the tax paid. The same result applies where the schedule is not respected: only the portion paid within the deadlines of the plan benefits. Available cash is therefore checked before filing, not after.

No, not necessarily. The 40% surcharge penalises deliberate failure, and article 1729 of the General Tax Code provides no exception for a taxpayer who corrects themselves. The Paris judicial court held that "the spontaneous filing of a rectifying return does not, in principle, exclude the existence of a deliberate failure" (our translation) (TJ Paris, 8 November 2024, No. 22/12687), and dismissed all the taxpayer's claims. Where the surcharge is upheld, the halving of the late-payment interest is also lost for the same omissions, since article 1727 of the General Tax Code excludes it for an infringement incompatible with good faith.

The Paris administrative court of appeal ruled the same way for an omitted capital gain, corrected in June 2013 after a request for information in May 2013, when the bank's documents dated from April 2012 (CAA Paris, 30 January 2020, No. 18PA01964).

The date of assessment nevertheless remains a point of defence. The Paris court of appeal points out that "the intention to evade tax need only be established on the date of the inaccurate or incomplete return" (our translation) (CA Paris, 14 November 2022, No. 20/16282), and set aside the surcharge for several years of wealth tax (impôt de solidarité sur la fortune). The file must therefore establish what the taxpayer knew when making the initial return, supported by dated documents.

An individual domiciled in France must declare each year, with their income tax return, the accounts opened, held, used or closed abroad; sums transferred from an undeclared account are, unless proved otherwise, taxable income (article 1649 A of the General Tax Code). The regularisation therefore operates on two levels: the declaration of the accounts and the taxation of the income or assets.

The cost is calculated over a long period, because the reassessment period reaches ten years where the declaration obligation was not met, unless it is proved that the total credit balances of the foreign accounts did not exceed €50,000 during the year (article L. 169 of the LPF). Each undeclared account carries a fine of €1,500, increased to €10,000 where it is located in a State or territory without an administrative assistance agreement allowing access to banking information (article 1736 of the General Tax Code). Where the tax office reassesses the tax linked to these sums, the 80% surcharge takes over: it cannot be lower than the fine and excludes both that fine and the surcharges of articles 1728 and 1729 (article 1729-0 A of the General Tax Code).

Spontaneity must be genuine. The Paris court of appeal refused the 15% surcharge rate that a taxpayer drew from a circular of 21 June 2013, an old administrative scheme, where the taxpayer had already been subject to a review of personal tax situation and to criminal proceedings with searches, holding that the step "cannot be considered to have been spontaneous so that he is not entitled to rely on the application of a 15% surcharge" (our translation) (CA Paris, 6 March 2023, No. 21/14406).

Yes. Where the obligation to declare a foreign account, capitalisation contract or crypto-asset portfolio has been breached at least once in the previous ten years, the tax authorities may ask the taxpayer to justify the origin of the assets within sixty days, then give formal notice to complete the reply within thirty days (article L. 23 C of the LPF). Failing justification, these assets are deemed, until proved otherwise, to constitute property acquired without consideration (article 755 of the General Tax Code).

They are then subject to gift and inheritance duties at the highest rate in table III of article 777, calculated on the highest value known to the tax authorities during the ten years before their request, less the assets whose origin has been justified. The 80% surcharge provided for undeclared accounts does not apply to these duties (article 1729-0 A of the General Tax Code).

For a regularisation, the practical consequence is clear: the origin of the funds is documented before filing, by means of gift deeds, inheritance returns, old statements or evidence of income already taxed. In the case decided by the Paris court of appeal on 6 March 2023, the tax authorities stated that they had accepted the family origin of the assets after documents establishing a manual gift were produced, and had not applied that provision. A file without proof of origin leaves open the application of article 755.

It reduces the exposure without erasing it. The tax authorities must report to the public prosecutor (procureur de la République) the facts that led to surcharges of 80 or 100%, or 40% where the taxpayer has already, in the previous six calendar years, been subject to one of those surcharges or to a complaint by the tax authorities, on more than €100,000 of tax. For persons subject to the transparency obligations of public life, the threshold falls to €50,000 and the 40% surcharge suffices. This obligation does not apply to a taxpayer who has spontaneously filed a rectifying return (article L. 228 of the LPF).

The criminal chamber reads this exception closely. It holds that "the exemption from criminal prosecution that may benefit a taxpayer who has spontaneously filed a rectifying return constitutes an exception to the mandatory reporting mechanism which must be assessed strictly" (our translation) (Cass. crim., 23 May 2024, No. 23-80.025). It infers that the exception falls away where the tax authorities rejected the return, and quashed the judgment that had annulled the prosecution.

Outside mandatory reporting, a complaint by the tax authorities remains possible, in principle on the binding opinion of the tax offences commission. That opinion is not required where there are substantial presumptions and a risk that evidence will be lost, notably where the fraud involves accounts opened abroad. Tax fraud is punishable by five years' imprisonment and a €500,000 fine, increased to seven years and €3,000,000 notably where accounts opened abroad are used (article 1741 of the General Tax Code). The criminal analysis is therefore part of the calculation, just like late-payment interest.

The refusal deprives the taxpayer of the protection attached to spontaneous filing. In the judgment of 23 May 2024, the tax office had held a regularisation request inadmissible on the ground that the assets arose from a concealed activity; the court of appeal had nevertheless found the step to be spontaneous. The Court of Cassation quashed that decision because the court had not taken the prior rejection into account (Cass. crim., 23 May 2024, No. 23-80.025).

The Court adds that the assessment of the validity of the rejection is for the tax judge and not the criminal judge. A challenge to the refusal is therefore brought before the competent tax judge, and the criminal file does not allow its merits to be re-argued.

The conditions of mandatory reporting are checked against the documents. The criminal chamber requires that the tax evaded exceed €100,000 and that "the surcharges applied, assessed at the stage of recovery, are those of 100%, 80% or 40% provided for by the various provisions to which it refers" (our translation) (Cass. crim., 13 September 2023, No. 22-82.288). It accepts that these conditions may be established by the reassessment proposal and the reply to observations, even if the recovery notice is not attached. A well-constructed rectifying return limits the risk of rejection; it is prepared with the same rigour as a reply to an audit.

On the tax covered by the request, the step is no longer spontaneous within the meaning of article 1727 of the General Tax Code. Administrative doctrine accepts, however, that a correction concerning another tax keeps that character (BOI-DAE-20-10, § 30). For the tax under audit, the route open is that of article L. 62 of the LPF: if the initial return was filed on time and the omission is not deliberate, a taxpayer who asks to regularise within thirty days of receiving the request owes only 70% of the late-payment interest. They file a supplementary return within thirty days of their request and pay tax and interest on filing, or by the deadline on the notice for a tax collected by roll, unless a payment plan is accepted by the public accountant.

Delay before the request weighs on the surcharge. The Riom court of appeal found deliberate failure by heirs who had filed a supplementary inheritance return six months after a request for information, holding that "this omission cannot be analysed as mere negligence, but as a deliberate failure to meet the filing obligation" (our translation) (CA Riom, 21 April 2026, No. 25/00379).

The same court nevertheless reduced the surcharge from €146,159 to €70,559, calculating it only on the balance due on the date of the request, "given that the heirs spontaneously paid the inheritance tax even before the rectifying return" (our translation) (same judgment). Advance payments therefore counted, without eliminating the penalty.

The inheritance return is in principle filed within six months of the death. Late filing carries the 10% surcharge from the first day of the seventh month following the expiry of that period, and the 40% surcharge where the return is not filed within ninety days of a formal notice (article 1728 of the General Tax Code).

A third party's advice does not rule out this surcharge. The Paris judicial court dismissed the claim of an heir who relied on the advice of their notary, recalling that "the penalty for failure or delay in filing a return by its very nature excludes any assessment of the taxpayer's good faith" (our translation) (TJ Paris, 30 January 2025, No. 23/11988).

Where the return was filed but omits assets, the correction takes the form of a supplementary return, which must be exhaustive. The criminal chamber holds that "the filing of a return, even if late under the tax provisions governing it, which contains omissions, starts the special limitation period" for tax fraud (our translation) (Cass. crim., 6 January 2021, No. 18-84.570). A second return repeating the same omissions can therefore found separate prosecutions. The inventory of assets is made before filing, with values at the date of death.

The period available to the tax authorities differs from that for income tax. It is three years where the return sufficiently revealed that the tax was due without further investigation (article L. 180 of the LPF), and six years where no special period applies (article L. 186 of the LPF). Since an omitted asset is not revealed by the return, the shorter period can rarely be invoked against it.

The regularisation covers the years that the tax authorities can still reassess, and this period varies with the tax and the situation. For income tax as for corporation tax, the tax office may in principle make corrections until 31 December of the third year following the tax year (article L. 169 of the LPF).

The period rises to ten years in case of concealed activity, false tax domiciliation abroad or breach of the declaration obligations relating to accounts, contracts, trusts and digital asset portfolios held abroad. For bank accounts, the extension does not apply if the taxpayer proves that the total credit balances never exceeded €50,000 during the year concerned.

The timetable also governs the reduction of late-payment interest, which requires filing before the reassessment period expires. Administrative doctrine gives the example of the income tax return for year N, the correction of which must be made by 31 December N+3 at the latest under the three-year period (BOI-DAE-20-10, § 40). The limitation period is therefore checked year by year before any filing.

The criminal judge may convict of tax fraud a taxpayer already penalised by the tax authorities only if the facts are sufficiently grave, assessed on precise criteria. The criminal chamber holds that "the gravity may result from the amount of the tax evaded, the nature of the acts of the person prosecuted or the circumstances in which they occurred" (our translation) (Cass. crim., 11 September 2019, No. 18-84.144).

On the same day, it held that the court of appeal had wrongly treated as gravity criteria "the absence of justification of the origin of the funds invested and the defendant's conduct after the fraud" (our translation) (Cass. crim., 11 September 2019, No. 18-81.040). The absence of regularisation is therefore not, in itself, a criterion of gravity.

This decision must be read to the end. The Court upheld the finding of guilt, itself noting the gravity arising from the use of intermediaries established abroad and from tax evaded of €235,580, and quashed the judgment only as to money laundering, the sentences and civil damages. A regularisation therefore does not neutralise facts that are already grave; its criminal value lies mainly in the exception of article L. 228, so long as the tax authorities do not reject the return.

Late-payment interest is not a penalty. The Paris judicial court points out that "Late-payment interest is due as of right and implies no assessment by the tax authorities of the taxpayer's conduct" (our translation) (TJ Paris, 18 February 2026, No. 24/10699). Good faith is therefore not enough to remove it; only the exceptions provided for by article 1727 of the General Tax Code remove it as of right, such as the express statement on the return of the grounds for an arguable position.

The discussion then concerns its base and its duration: starting point specific to each tax, end of the count in the month the rectifying return is filed (BOI-CF-INF-10-10-20, § 120), application of the reduced rate only to the sums paid.

Filing a rectifying return may also open an exchange with the tax office on the surcharges. The criminal chamber notes that "Before a tax audit is opened, a taxpayer may refer a request for a settlement to the tax authorities by filing a rectifying return" (our translation) (Cass. crim., 23 May 2024, No. 23-80.025). A settlement is not a right: it is within the discretion of the tax authorities and is negotiated on a calculated file.