Tax returns preparation in France: Expert support for foreign subsidiaries?

Deadlines and filing process

Tax deadlines in France are fixed and strictly enforced. A corporate income tax return is due by the end of May for calendar-year entities, or within 3 months of fiscal year-end for subsidiaries with different closing dates. VAT returns must be filed monthly or quarterly depending on turnover, payroll filings are monthly via DSN, and local CFE returns are generally due in December.

To make this clearer, here is a simplified timeline:

• CIT return: End of May or 3 months post year-end.

• VAT: Monthly/quarterly, depending on sales volume.

• Payroll taxes: Monthly, covering both income tax and social charges.

• Local CFE tax: December each year.

Missing any of these deadlines results in automatic surcharges. Unlike some countries, France does not grant automatic extensions.

Penalties and risks of non-compliance

Failing to prepare or file French tax returns correctly can lead to heavy sanctions. The main risks are:

• Late corporate tax return: 10% penalty on tax due, plus 0.2% interest per month of delay.

• Errors or omissions due to negligence: Penalty up to 40% of the underpaid tax.

• Suspected fraud: Penalty up to 80% of the underpaid tax.

• Late VAT or payroll filings: 10% surcharge of the amount due, plus monthly interest.

Example: A subsidiary owing €100,000 that files one month late faces €10,000 in penalties plus €200 in interest. Beyond the financial hit, repeated compliance failures increase the risk of tax audits, which can tie up resources for months.

Why outsource tax returns preparation

Managing tax obligations internally may appear cost-effective, but for foreign subsidiaries in France it is rarely practical. Outsourcing tax returns preparation provides four key benefits:

• Efficiency: On average, 139 hours/year are spent on compliance; outsourcing frees this time for strategic work.

• Accuracy: Local CPAs know French GAAP and filing procedures, minimizing the risk of errors.

• Risk reduction: Correct and timely filings prevent penalties and reduce audit exposure.

• Optimization: Professional review ensures use of available tax credits (R&D, training, impatriate regimes) and treaty relief to avoid double taxation.

Do you know that 54% of tax leaders outsource compliance specifically to handle regulatory complexity.

How Vachon supports foreign subsidiaries ?

Since 1997, Vachon has specialized in helping foreign subsidiaries and branches in France with full-scope tax services. Our team of bilingual CPAs works daily with companies headquartered in the US, UK, Germany, Spain, and beyond, ensuring that their French operations remain compliant while integrating seamlessly with parent-company reporting.

Our services cover:

• Corporate tax return preparation and filing (Form 2065) with complete data review and electronic submission.

• VAT and payroll filings managed monthly or quarterly to ensure no missed deadlines.

• Tax advisory to identify credits and deductions, analyze treaty benefits, and manage transfer pricing compliance.

• Audit representation in case of a tax inspection, handling communication with French authorities.

• Expatriate support through preparation of personal income tax returns and advice on favorable regimes for foreign executives.

With memberships in the Ordre des Experts-Comptables and the AICPA, and decades of experience in French GAAP, IFRS, and US GAAP, we act as both a local CPA partner in Paris and a bridge to your headquarters’ requirements.

Key Benefits of Partnering with Vachon

Choosing a professional partner for tax returns preparation in France provides tangible results:

• Peace of mind: All deadlines tracked and filings made on time.

• Lower overall costs: Outsourcing saves both staff hours and penalty payments.

• Clear reporting: French compliance for authorities, English reports for headquarters.

• Confidence: Senior CPAs firm with over 25 years of experience ensure every obligation is met.

Don’t let French tax compliance drain your resources or expose your company to penalties. With Vacho, you get a dedicated team of senior CPAs ensuring accurate, timely, and optimized tax returns for your subsidiary.

Ready to simplify your tax returns preparation in France?

Contact our team today for a free consultation.