Cahsflow Management

SUMMARY :

1. URSAFF and social security

2. Taxes

3. Rent

This content is a translation of the document ‘Mesures de soutien économiques’ (Economic support measures) drafted by the government

URSAFF and social security

What should I do if I would like to defer social security contribution payments (URSSAF)?

The national URSSAF networks have set exceptional measures to grant payment deadline extensions for the November social security contribution payments.  

▧ For employers

Employers may defer all or part of the payment of their employee and employer contributions for the 5 and 15 November 2020 deadlines. However, the declarations must be submitted by the scheduled dates. The deferral of URSSAF contributions also applies to supplementary pension scheme contributions.

For départements that are not subject to lockdown measures (in particular French Guiana, Mayotte and Réunion), this possibility is reserved for employers affected by activity restrictions or closures.

No penalties or late fees will be applied.

▧ For the self-employed:
Personal social security contributions for self-employed persons will not be debited in November (the quarterly due date of 5 November and the monthly due dates of 5 and 20 November have been suspended). The direct debit for the contributions due in November will not be carried out. This is an automatic procedure and self-employed workers have nothing to do for this. Those who pay by other means will be able to adjust the amount of their payment.

No penalties or late fees will be applied. The terms and conditions for adjusting these payment deadlines will be specified at a later date.

However, self-employed workers who are able to do so are invited to pay their contributions whenever possible, according to the terms and conditions given by their local URSSAF. They can adjust their payment schedule by re-estimating their 2020 income, which serves as the basis for calculating provisional contributions.

In addition to these measures, self-employed workers may request aid from the Council for the Social Protection of Self-Employed Workers (Conseil de la Protection sociale des travailleurs indépendants, CPSTI) to partially or totally cover their contributions, or for exceptional financial assistance.

Craftsmen can complete these steps:

• On the website secu-independants.fr, under My Account (Mon compte) to submit an estimated income or request a payment schedule deferment
• By e-mail, by selecting the subject “Your contributions” (Vos cotisations), reason “Difficulties – Coronavirus” (Difficultés – Coronavirus)
• By calling 3698 (free service + cost of call)

Professionals in private practice (professions libérales) can complete these steps:

• On their online account on urssaf.fr by sending a message under the menu “A declaration formality” > “Declare an exceptional situation” (Une formalité déclarative > Déclarer une situation exceptionnelle).
• By contacting URSSAF on 3957 (€0.12/min + cost of call) or on 0806 804 209 (free service + cost of call) for practitioners and medical assistants.

▧ For freelancers (autoentrepreneurs):

The monthly declaration due for September and the quarterly declaration for the third quarter should be reported by 12 p.m. on 2 November.

Freelancers may pay all or part of the social security contributions due on that deadline, or they can opt out of paying them altogether.

Those who have already made their declarations can modify their payment order to reduce the amount paid or to change the amount to zero.

No late payment penalties will be applied. The terms and conditions for adjusting partial or non-payments will be specified at a later date.

 Freelancers who have been granted a payment extension may also request to push back other deadlines.

You can find more information at the following link: https://mesures-covid19.urssaf.fr/

How can I defer my social security contributions to URSSAF?  

▧ For employers

To benefit from a deferral, simply fill in a preliminary request form on your online account. If URSSAF does not reply within 48 hours, the request is considered to have been accepted. Unpaid contributions shall be automatically deferred. URSSAF will contact the employers at a later date to propose a plan for settling their debts.

If URSSAF does not reply within two working days of the form’s submission, the request for deferral is considered to have been accepted.

The company may reduce all or part of its contributions through the electronic employers’ declarations (déclarations sociales nominatives, DSN) payment system if it has opted for electronic payment, or by adjusting the amount paid by bank transfer if it uses this payment method. No matter what, the contributions should be declared in the DSN (parts 78, 81, 22 and 23).

• Direct debit of contributions: many companies pay their contributions through automatic direct debit. To prevent being debited during this period, companies must:
  • delete the direct debit option and switch to electronic payment. If the deadline is close (less than 5 or 6 days), the direct debit order has already been sent. The direct debit must therefore be blocked and the company must notify URSSAF as soon as possible to discuss a staggered payment schedule.
  • Sending a DSN: companies are required to make their DSN declarations even if they wish to defer contribution payments. They can lower the amount of the payment or change it to zero, but the DSN must be sent.
  • URSSAF contacts: a contact person should be appointed to deal with the agent tasked with helping the company in the event of a problem.

▧ For the self-employed:

The suspension of direct debit is automatic and does not require any action on the part of the insured. You can find more information at the following link: https://mesures-covid19.urssaf.fr/

Exemption from social security contributions

Scheme implemented during the first wave

Due to the Covid-19 health crisis which led to a lockdown from March to June 2020, an exemption from employer contributions for small and medium-sized enterprises (SMEs) was put in place.

• SMEs (fewer than 250 employees) in sectors particularly affected by thr economic and financial consequences of the spread of the Covid-19 epidemic (in Annex 1), particularly with regard to the reduction of their activity and their dependence on receiving the public, were able to benefit from an exemption from employer contributions between 1 February 2020 and 31 May 2020.
• SMEs (fewer than 250 employees) that depended largely on those sectors mentioned above (Annex 2) and that suffered a very sharp drop in turnover were also exempt from employer contributions for the period of employment between 1 February 2020 and 31 May 2020.

Companies that suffered a sharp decline in turnover must fulfil at least one of the two following conditions:

• The company experienced a turnover loss of at least 80% over the period from 15 March to 15 May 2020;
  • either in relation to the same period in 2019;
  • or relative to the average monthly turnover for 2019, prorated for two months;
  • or, for companies created after 15 March 2019 and before 10 March 2020, relative to the average turnover over two months between the start date of the company and 15 March 2020.
• The company experienced a decrease in turnover between 15 March and 15 May 2020 compared to the same period of the previous year. This drop should be equal to at least 30% of the 2019 turnover. For companies created between 1 and 14 March 2019, the comparison is made by calculating the average turnover prorated for 12 months, between the date of creation of the company and 31 December 2019.
• VSEs (fewer than 10 employees) in sectors whose business relies on receiving the public and that were forced to close due to the Covid-19 health crisis (excluding voluntary business closures) are exempt from paying employer contributions for the employment period between 1 February 2020 and 30 April 2020. The business activities from these sectors that were not already mentioned among those affected by the economic and financial consequences of the spread of the Covid-19 epidemic, are those forced to close pursuant to Decree No. 2020-293 of 23 March 2020, which laid out the overall measures necessary to handle the Covid-19 epidemic within the framework of the national health emergency.
• Employers located in French Guiana and Mayotte are exempt for the employment period from 1 February 2020 until the last day of the month in which the national health emergency ended in these regions.
• Employers to whom the ban on receiving the public was extended are exempt for the employment period starting from 1 February 2020 until the last day of the month preceding the month when they were once again authorised to receive the public.

The exemption is total and covers the following employer’s social security contributions and contributions: social security contributions, unemployment insurance contributions, autonomous solidarity contribution, national housing fund contribution, due on remuneration paid to employees falling within the scope of the general reduction (with the exception of supplementary pension contributions).

This exemption is applicable even if the eligible company benefited from a deferral of the payment of contributions between March and June 2020. The amounts corresponding to the exempt employer’s contributions and contributions will therefore not be due.

In addition, there is also provision for assistance with the payment of outstanding social security contributions (employer and employee) for the year 2020, equal to 20% of the remuneration that is exempt from employer’s contributions. The amount of payment aid shall be chargeable against all sums due to the collection organisations for the year 2020 or 2021, after application of the exemption and any other total or partial exemption applicable.

The total amount of exemptions and payment aid received may not exceed €800,000. This amounts to €120,000 per company for the fisheries and aquaculture sector and €100,000 per company for the primary agricultural production sector.

The exemption is to be declared by the employer in their DSN via the CTP 667 and the amount of the payment aid via the CTP 051.

In addition, companies with fewer than 250 employees that are not eligible for exemptions and payment aid but which fall within one of the sectors of activity that can prove a decrease of at least 50% in their turnover compared to the same period in 2019, may request, as part of a settlement plan, a partial rebate of debts for employer contributions due for the period from 1 February to 31 May (due in March, April, May and June). Its amount may not exceed 50% of the employer’s contributions included in the plan.

In 2021, company directors and spouses working for each (conjoints collaborateurs) other can benefit from a reduction in their final personal social security contributions and contributions for 2020 in the amount of:

• 2,400 euros for activities in the so-called S1 and S1 bis sectors, which suffered a very sharp drop in turnover;
• 1,800 euros for the so-called S2 sectors.

In addition, in order to benefit from the financial effect of the reduction that will be calculated in 2021 following the declaration of real 2020 income, self-employed workers and spouses working for each other may reduce their 2020 provisional contributions by applying an allowance to their total estimated income for the year 2020. It is set at: €5,000 for the S1 and S1 bis sectors, €3,500 for the S2 sector.

For self-employed workers covered by the microsocial regime, the reduction takes the form of a deduction made by the freelancer when they declare their turnover. This deduction is equal to the amount of the turnover or revenue achieved over the period: from March to June 2020 for those whose main activity falls under sectors 1 and 1bis and from March to May 2020 for those whose main activity falls under sector 2.

For more information please visit: https://www.urssaf.fr/portail/home/employeur/beneficier-dune-exoneration/measures-covid-19/exoneration-de-cotisations.html

Scheme for companies in areas with a curfew

Following the new restrictions on receiving the public due to the health crisis, the government announced new decisions regarding social security contribution exemptions for companies on 15 October.

The following companies will benefit from a total exemption from employer social security contributions, excluding private pension schemes, as well as assistance with the payment of outstanding social security contributions equalling 20% of the total payroll:

• Companies with fewer than 250 employees in sectors particularly affected by the economic and financial consequences of the spread of the Covid-19 epidemic, particularly with regard to the reduction in their activity and their dependence on receiving the public (in Annex 1), which have been closed or are in areas with a curfew and experiencing a 50% loss of turnover.
• Companies with fewer than 250 employees in sectors whose activity depends on that of the above-mentioned sectors (Annex 2), starting from the loss of 50% of their turnover, regardless of where they are based.

This scheme will be implemented for the contributions due for September. Contributions will be assessed in October.

The government will also introduce a reduced contribution scheme for self-employed workers in the same situation (the condition regarding the number of employees does not apply).

Parliament shall specify the terms and conditions of this scheme during their end-of-year examination of the financial laws.

Scheme set up after lockdown

Following the second lockdown, the scheme put in place for the curfew has been extended and expanded:

• Companies with fewer than 250 employees in the above-mentioned particularly affected sectors will benefit from the exemption and payment aid scheme, regardless of where they are based
• Companies with fewer than 50 employees who can no longer operate again because they cannot receive members of the public will also benefit from the scheme

This scheme will also now benefit the self-employed workers concerned by it.

Parliament shall specify the terms and conditions of this scheme during their end-of-year examination of the financial laws.

Frequently asked questions

Most of the answers to the questions people ask are available on the URSSAF website at the following link: https://mesures-covid19.urssaf.fr/faq

How exactly do you assess the number of employees? Should staff recruited on an intermittent basis be accounted for?
The employer’s workforce is assessed at company level with all the establishments taken together. It corresponds to the average number of persons employed in each month of the previous calendar year.
Persons recruited on a temporary basis, including on an intermittent basis, as well as persons recruited on a part-time basis are taken into account in due proportion to their working time in the company.

How do you assess the activity criterion when the company has several distinct business activities?
The main activity of the employer is determined at company level. Regardless of the employer’s APE code, only the employer’s actual business activity can effectively determine eligibility for the scheme.
The employer’s main activity is the only one that is taken into account. Thus, if an employer has a separate ancillary activity in addition to its main activity, it will not be taken into account when assessing the eligibility for the exemption and payment aid schemes.
However, in cases where a company has several separate establishments with different activities, the right to an exemption may be assessed on the basis of the activity of each of the establishments, independently of the activity of the others. If the activity of an establishment falls within one of the eligible sectors, the exemption will be applied only to the employees of that establishment.

How do I obtain a certificate proving that I am up to date with my social security contributions (attestation de vigilance) from URSSAF or MSA?
Companies can download their attestation de vigilance from their online account if they are up to date with their contributions as at 1 March 2020. You can still get this certificate if you have had difficulty paying your contributions after this date following the consequences of the health crisis.

Can I just cancel my social security contributions?
No, you cannot cancel contributions. Article 65 of this year’s amended finance law of 30 July provides a legal framework allowing for exemption measures and settling of debt.
This is the only framework in which the sums due can be exempted.

When you contribute to URSSAF, you contribute to the financing of our social security model, just like all employees, companies, individual employers and self-employed persons do. Social security contributions are essential to us all. They guarantee that we are all protected. They are paid directly to the various Social Security branches and other social protection bodies. They are used to finance expenses such as health care, family assistance, pensions, support for the public employment service, etc.

Moreover, the URSSAF network cannot simply cancel social security contributions.

Can I benefit from contribution deferrals, too, if I use the “Tese” scheme?
Where possible, the direct debit planned for the 15 May 2020 deadline was cancelled and pushed back to 15 June 2020. You did not have to do anything.

If you do not wish to defer all your contributions and prefer to pay all or part of your contributions, you can contact your URSSAF to set up a transfer for immediate payment.

If you pay by cheque and wish to continue doing so, please note that postal delivery times and processing by our services will extend the time it takes to deposit the payment.

For more information on how to set up this transfer, please send your request via your employer’s account > My mailbox > New message > A declaration formality > Declare an exceptional situation (Ma boîte aux lettres > Nouveau message > Une formalité déclarative > Déclarer une situation exceptionnelle).

Information will be provided at a later date for future deadlines.

Will it be problematic if my employees’ professional expenses are unusual?
You can certainly continue to reimburse employees’ professional expenses, whether they work on site or remotely.

For employees who incur unusual business expenses, reimbursements will be considered with goodwill in future audits.

Milage allowances, hotel nights, meals, taxi fares, car rental costs, additional childcare costs or any other costs incurred by the company or reimbursed to the employee which enable them to travel to their place of work will be considered justified in cases where remote working is impossible. The employer should keep the invoices if they reimburse expenses on a real basis.

Tax Payments

What should I do if I would like to an extension on my tax payment deadlines?

Your Companies Tax Office (Service des Impots des Entreprises, SIE) remains your main point of contact: in the event of difficulties, it can grant you payment extensions for your direct taxes (property tax, CFE, corporate tax, etc.) on a case-by-case basis.

If you had to push back tax payment deadlines last spring and have not yet been able to pay them, your SIE is also there to help you. They offer “Covid-19 specific” settlement plans to provide the best support possible to companies.

These payment plans are designed to spread the payment of your taxes due during the peak of the crisis over a period of 12, 24 or even 36 months, depending on your level of indebtedness. If you have also deferred social security contribution payments, these will automatically be taken into account when calculating the duration of these plans and your social security contribution debts will be staggered by your URSSAF over the same period as your tax debts.

To do so, do not delay and submit your request for a staggered tax payment plan by 31 December 2020 at the latest. Complete the form (PDF format) and send it using the secure messaging system in your professional account online or, failing that, by e-mail or post to your SIE.

The DGFiP’s Companies Tax Offices (Services des Impots des Entreprises, SIE) have put in place a scheme for exceptional tax payment deadline extensions

Deferral of tax deadlines for companies

• Companies (or chartered accountants who work for clients in this situation) can ask the SIE to defer the filing of tax returns and other similar declarations and the payment of their next direct tax instalments (corporate tax instalment, payroll tax, CVAE), and not be penalised for it. This request can be made on the SIE
  If they have already settled their payments for March, they may still have the possibility to oppose the SEPA direct debit via their bank online. Otherwise, they can also request to be reimbursed by their SIE once the transfer has been made.

• Self-employed workers can adjust the rate and instalments of their tax deducted at source at any time. They can also defer the payment of their instalments for their tax deducted at source on their professional income from one month to the next, up to three times if their instalments are monthly, or from one quarter to the next if their instalments are quarterly.
• Monthly payment plan contracts for the payment of the business property contributions (contribution foncière des entreprises, CFE) or property taxes (taxe foncière, TF) can be suspended on the site gouv or by contacting the Direct Debit Centre (Centre prélèvement service): the remaining amount will be debited from the balance, without penalty.

To simplify this, the DGFiP has provided an application template that you can send to the SIE.

You can access all of these procedures on your personal account on the impots.gouv website, in the section “Manage my tax deducted at source” (Gérer mon prélèvement à la source). Any action before the 22nd of the month will be taken into account for the following month.

Scheme to reduce the payment of business property contributions (contribution foncière des entreprises, CFE)

The Government has presented a scheme to lower professional taxation and, in particular, business property contributions (contribution foncière des entreprises, CFE) in the hospitality, tourism and event sectors.

It has decided on two concrete measures relating to CFE to support companies whose activity has been particularly affected by the health crisis.

Firstly, CFE payment in its entirety is deferred to December 15.

Thus, companies in the sectors concerned and that have a CFE instalment due on June 15 should disregard it: a deferral until December 15 without penalty is automatically granted. The CFE balance shall be paid on this date.

Likewise, companies that pay their CFE in monthly instalments can suspend these instalments: the balance of the tax due in its entirety will then be deferred until 15 December, without any penalty.

Secondly, within the framework of the amended finance law 4, the Government has implemented a new support measure enabling communes and intercommunal consortiums that so wish to grant a rebate of 2/3 of the total CFE to companies in these sectors of activity. To assist with this business support measure, the State will pay half the cost of the tax rebate when a local authority decides to implement it, even though the State does not collect this tax.

Adjusted payment terms for instalments of corporate tax (impôt sur les sociétés, IS) and the contribution on the added value of companies (contribution sur la valeur ajoutée des entreprises, CVAE)

To assist companies to gradually regrow their business, the government is offering them the possibility to further adjust their IS and CVAE instalments. Companies can set up a payment plan for the instalments according to the projected income for the financial year. The tolerated margins of error have also been increased. Full details are annexed to this press release. The details are as follows:

Details on the measures concerning the 2020 IS and CVAE instalments

Concerning the corporate tax (impôt sur les sociétés, IS)

• Companies whose second instalment (normally equal to 25% of the Y-1 IS) is due on 15 June have until 30 June to pay it, instead of 15 June. They do not have to do anything in particular to get this extension. Therefore, the company will be fully aware of its 2019 IS result (filed on 30 June) and can thus calculate its instalment according to the legal rules.
• Instalments No. 2 to 4 due starting in June 2020 may be adjusted flexibly, according to the following rules:
  • the second instalment can be adjusted so that the sum of the first and second instalments corresponds to at least 50% of the forecast IS for the current financial year, with a margin of error of 30%;
  • the third instalment can be adjusted so that the sum of the first, second and third instalments corresponds to at least 75% of the forecast IS for the current financial year, with a margin of error of 20%;
  • the fourth instalment can be adjusted so that the sum of all the instalments paid corresponds at least to the amount of the forecast IS for the current financial year, with a margin of error of 10%.
• These payment adjustments:
  • are available for all instalments No. 2 to 4 of all current and future financial years, but stop starting from financial years beginning after 20 August 2020;
  • remain optional: a company that does not make use of it will continue to observe the rules of current law. Reminder: the first instalment must be equal to 25% of the Y-2 IS and the other three to 25% of the Y-1 IS. The company can stop paying as soon as it reaches the total amount of its IS for the current financial year (with no margin for error);
  • are subject to compliance with responsibility commitments (non-payment of dividends, etc.) related to economic support measures when these measures are granted to large companies (company or group with at least 5,000 employees or a turnover over €1.5 billion);
  • concern the IS instalments, including the social contribution of 3.3%;
  • can be exercised without any particular official procedures.
• In the event of under-adjustment, a 5% surcharge and late payment interest may be applied, when the balance is drawn, to the difference between the expected total (minus the margin of error) and the amount paid.
• The rules for large companies’ final instalment (obligation to pay 95% or 98% of the Y IS) remain unchanged.
• The following applies to companies that have deferred the payment of their March 2020 instalment, in addition to the possibilities for future instalment adjustments described above:
  • if the March instalment was deferred, it must be paid by 15 June 2020, i.e. after the three initially planned months of deferral;
  • the June instalment is suspended (the September instalment will have to “make up” for this eliminated instalment – if necessary, by opting for the adjustment described above);
  • special case: if the March 2020 instalment was a fourth instalment (financial years ending between 20 February and 19 May), it is suspended (carry-over to the balance) and the first instalment for the following financial year must be paid in accordance with the rules of ordinary law by 15 June at the latest.
• As mentioned above, these terms for deferring the March 2020 instalment are only possible for large companies provided that they comply with the aforementioned responsibility commitments (in particular the non-payment of dividends).

I receive tax credits, can they be paid quickly?

General framework for accelerated corporate tax credit refunds

To provide financial assistance to struggling companies, the Ministry of Public Action and Accounts has announced that it will be possible to apply for early repayment of corporate tax claims refundable in 2020 and accelerated processing of VAT credit claims by the Public Finances Directorate General (DGFiP).

Companies benefiting from one or more tax credits set to be refunded in 2020 can now request to be reimbursed the balance of the available claim, after deducting it from their corporate tax due for the 2019 financial year, without having to wait to file their income statement (tax return, liasse fiscale), if applicable.

This scheme applies to all tax credits refundable in 2020, including the competitiveness and employment tax credit (crédit d’impôt pour la compétitivité et l’emploi, CICE) and the research tax credit (crédit d’impôt recherche, CIR), though only to the portion due to be refunded this year. This applies in particular to credits concerning certain sectors experiencing hardship such as:

• the tax credit for film production expenses;
• the tax credit for production expenses for audiovisual works;
• the tax credit for production expenses for foreign films and audiovisual works;
• the tax credit for companies involved in live musical or variety shows;
• the tax credit for production expenses for phonographic works;
• the tax credit for video game creators.

Companies can declare this online on their professional account on impots.gouv.fr:

• the application for a tax credit refund (form No. 2573),
• the declaration to justify the tax credit (declaration No. 2069-RCI or a specific declaration, unless it has already been filed previously),
• if the income statement is not available, the corporate tax balance statement (form No. 2572) allowing the tax due to be settled and the refundable claim for 2020 to be recognised.

The Companies Tax Offices (Service des Impots des Entreprises, SIE) are working in full gear to process company reimbursement claims as quickly as possible, within a few days.

VAT credit refunds

To obtain a VAT credit refund, the company must apply online, directly via its professional account or via an approved partner (EDI partner).

In the context of the Covid-19 crisis, the DGFiP’s services will process applications for VAT credit refunds as quickly as possible.

Maintaining the benefit of the tax credit for the employment of an employee at home when the tutoring service is provided remotely

Private individuals who employ tutors and teachers at home are eligible for an income tax credit. Due to the particular circumstances of the current health crisis, the Ministry of Public Action and Accounts has announced that these services will continue to qualify for this tax advantage when they have to be carried out remotely during this time, on an exceptional and temporary basis.

Can I benefit from a tax rebate if it could help me?

How it works

If your company is struggling to make payments due to the virus, you can request a payment plan from the treasury in order to stagger or defer the payment of your tax debt.

If this plan is not enough to resolve these difficulties, those in the most dire situations can apply for a direct tax rebate (e.g. income tax, territorial economic contribution).

Whether you can benefit or not from these free measures is determined by an individualised examination of the application which takes into account the company’s situation and financial difficulties.

Download the free rebate application form on the dedicated page: https://www.impots.gouv.fr/portail/node/13465

What should I do if I can’t pay my VAT?

Requests for deferral only concern direct taxes and social security contributions. You must still pay indirect taxes (VAT, excise duties, etc.) on the set due dates, without any delay.

The Government’s action focuses on taxes that directly affect companies and not the final consumer, which already represents a considerable effort.

Companies only act as tax collectors on behalf of the State for indirect taxes, such as the transfer of tax deducted at source, but they are not liable for them. In the event activity slows down, indirect taxes also “slow down”.

Requests for deferral only concern direct taxes, therefore, VAT and tax deducted at source are to be paid on the due dates without any delay.

Businesses that are unable to meet their VAT return and payment deadlines should contact their Companies Tax Office (Service des Impots des Entreprises, SIE) to find a suitable solution. We would also like to remind you that any VAT duty payment deferral or remission cannot be granted to companies.

However, if you are unable to gather all the documents needed to draw up your VAT return (non-presumptive tax regime (réel normal)) due to the current lockdown, a declaration system based on an assessment of the tax due is implemented. Therefore, you can:

• make a simple estimate of the amount of VAT due for a month and pay an instalment corresponding to this amount the following month, as provided for by the French Official Journal of Public Finance (Bulletin officiel des finances publiques, Bofip) during holiday periods (paragraph 260 of Bofip BOI-TVA-DECLA-20-20-10-10). The tolerated margin of error is 20%;
• pay a flat-rate VAT instalment, for companies that only experienced a drop in turnover due to the Covid-19 crisis, exceptionally and for the duration of the lockdown put in place by the authorities, as follows:
  • for the declaration made in April for March:
    • by default, 80% of the amount declared for February or, if you already resorted to paying an instalment for the previous month, 80% of the amount declared for January;
    • if the business has been closed since mid-March (total closure) or has fallen sharply (estimated at 50% or more), a flat rate of 50% of the instalment for February or, if you have already resorted to paying an instalment for the previous month, a flat rate of 50% of the amount declared for January;

When paying a month’s instalment the amount of the payment must be mentioned on line 5B “Sommes à ajouter, y compris acompte congés” [“Sums to be added, including holiday instalment”] of the gross VAT box and the

“Mention expresse” [“Explicit mention”] box should contain the keywords “Acompte Covid-19” [“Covid-19 instalment”] and the flat rate used, for example: “Forfait 80 % du mois M” [“Flat rate 80% of month M”].

• for the declaration made in May for April:
  • the same terms as the previous month if the lockdown period is extended, rendering it impossible to make an adjustment declaration on that date;
• for the adjustment declaration:
  • the VAT due is adjusted according to real elements drawn from the previous months’ business, for which instalments have been paid, with the instalments paid debited.

When the adjustment declaration is filed, it must be cumulative, including the elements relating to the past month with those of the previous months for which instalments have been paid. The sum of the instalments paid for the previous months must be debited and mentioned on line 2C “Sommes à imputer, y compris acompte congés” [“Sums to be debited, including holiday instalments”] of the deductible VAT box

For more information, visit the dedicated page on the Public Finances Directorate General’s website: https://www.impots.gouv.fr/portail/node/13467

Frequently asked questions

Is it possible to speed up the reimbursement of outstanding competitiveness and employment tax credit (crédit d’impôt pour la compétitivité et l’emploi, CICE)/research tax credit (crédit d’impôt recherche, CIR) balances?
Businesses can apply for early repayment of their tax credits without waiting to file their income statement in May. A company that benefits from one or more tax credits due to be refunded in 2020 can now request to be reimbursed the balance of the available sum outstanding, after offsetting it against its corporate tax due for the 2019 financial year. This system applies to all tax credits that due to be refunded in 2020, in particular the CICE, CIR, innovation tax credit (crédit d’impôt innovation, CII), etc. (for the part which is due to be repaid this year).

Can I benefit from a tax deadline extension if my business has been interrupted or restricted due to a closure measure in areas with a curfew?
Companies whose business has been interrupted or restricted due to a closure measure in areas with a curfew, or when their financial situation justifies it, can obtain extended deadlines for the payment of their direct taxes (excluding VAT and tax deducted at source) on their next tax payment due dates. They must request this from their tax department, which may grant it after examining their situation on a case-by-case basis.

In addition, the due date for the property tax owed by businesses that own and operate their own commercial or industrial premises can be extended by 3 months, on simple request, as announced on 12 October.

How can I adjust my fiscal situation if I am struggling to pay my professional taxes due during the period of March to May 2020?
You can apply for a “covid-19 specific” settlement plan, subject to meeting the conditions detailed here.

This plan, established according to your level of tax and social security debt, lasts for a maximum of 36 months. A specific form (PDF format) must be completed and sent to your Companies Tax Office (Service des Impots des Entreprises, SIE) via the secure messaging system in your professional account online, or failing that, by e-mail or post.

I would like to obtain a “covid-19 specific” settlement plan. Which private creditors must I contact beforehand in order to meet the conditions for obtaining this plan?
This condition aims to ensure that your company is working on settling all of its debts with its public and private creditors.

You can benefit from a “covid-19 specific” settlement plan if you have previously requested a payment deferral, an increased authorised overdraft limit or additional cash lines from your credit institution for the payment of loan instalments that were due between 1 March 2020 and 31 May 2020. Once this request has been made, you can confirm that you have done this by ticking the appropriate box on the application form (PDF format).

Rent

What should I do if I am struggling to pay the rent for commercial premises?

Companies struggling to pay rent or paying rent late that do not reach an agreement with their landlord may resort to non-judicial mediation:

• Either the Business Mediator;
• Or, should it exist in the département in question, the departmental conciliation commission for commercial leases.

For what reason and how can I refer my case to the Business Mediator?
Unlike judicial and administrative procedures, Business Mediation offers a free, fast (under three months), and confidential mediation service. Business information remains confidential and the company’s reputation is not affected.

The benefit of mediation is twofold. Above all, it helps to resolve issues that undermine business relations and consequently relieves the courts of disputes that can be resolved amicably. Link to refer a matter to the Business Mediator as soon as possible.

Please note that prior to a referral, you can ask questions or seek advice on how to proceed, confidentially, using the contact form.

For what reason and how can I refer my case to the departmental conciliation commissions for commercial leases?
The departmental commissions are joint bodies, with representatives of both landlords and tenants. Their very composition is such as to foster mutual understanding between the parties. An interministerial circular had been sent to prefects requesting that they reinstate these commissions insofar as possible, and they are being reinstated in the départements where they had been dissolved.

Mediation is not one of the competences normally assigned to them by law. However, in application of the principle of freedom of contract, the landlord and the tenant may enter into an agreement to refer the matter to the conciliation commission to find amicable solutions.

Under this agreement, the Parties undertake to:

• recognise that the departmental conciliation commission has the jurisdiction to seek a mediated settlement on the above-mentioned dispute, as an extension to the scope of its legal jurisdiction;
• recognise the implementation of the provisions of articles D. 145-12 to D. 145-18 of the French Commercial Code, with the additional possibility of referring the matter to the commission or being summoned by it via an e-mail sent with delivery confirmation;
• provide the departmental conciliation commission with all the documents it has requested to support the request, and in particular the accounting and financial documents validated by a chartered accountant, as well as a sworn statement listing any government aid received, in order to help the commission members find a mediated settlement;
• recognise that the departmental conciliation commission has the jurisdiction to give an opinion if mediation does not lead to an agreement between the parties, and that this opinion may be used by the parties before a judge in the event this leads to a dispute before the court.

Furthermore, during the mediation period, which shall last no longer than three months from the signing of the agreement, the parties shall refrain from taking any legal action against each other. Under no circumstances shall the conciliation commission be vested with arbitration powers.

Pursuant to article 2238 of the French Civil Code, the period of prescription shall be suspended as from the signature of the agreement. The period of prescription shall start from the date on which the commission completes the conciliation. It cannot be shorter than six months.

As part the mediation process, the Parties may be assisted or represented by a lawyer.

Should the landlord and tenant reach a conciliation agreement, a deed must be drawn up, signed by the parties and initialled by the chairman and the secretary of the commission.

List of departmental conciliation commissions for commercial leases as at 2 November:

A tax credit to encourage landlords to renounce rent payments in favour of tenants of professional premises

The Government has undertaken to introduce a tax credit in the 2021 finance bill that encourages landlords to help support the companies most affected by the restrictions implemented as of 30 October.

The tax credit will benefit all landlords (both natural and legal persons), whatever their tax regime, who renounce at least one month’s rent owed by companies with fewer than 250 employees. These companies shall have been subject to administrative closure or belong to the hospitality sector.

This 30% tax credit shall apply to the total rent payments that they agreed to renounce from October to December 2020.

Frequently asked questions

Do companies have to pay outstanding insurance payments?
 Yes, there have been no specific measures in this regard.

Are invoices for operating lease payments (leasing, rental, equipment rental, etc.) suspended?
This is not intended for commercial and professional leases.