As part of the accelerated legislative process set up by the French Parliament, an emergency bill to combat the Covid-19 crisis (loi n°2020-290, the “Law”) was adopted on March 23rd, 2020. The Law notably provides that the French Government is allowed to take specific measures by ordinance to adapt certain aspects of the French legislative framework.

Among an impressive number of eagerly-awaited ordinances adopted by the French Council of Ministers (“Conseil des Ministres“) on March 25, 2020, Ordinance n°2020-306 (“Ordonnance n° 2020-306 du 25 mars 2020“) relates to the extension of time limits and the adaptation of judicial and administrative procedures (the “Ordinance on Deadlines”).

Generally speaking, in order to take in account the constraints of Covid-19 lockdown measures, the Ordinance on Deadlines postpones several administrative procedures – such as acts, formalities, registrations, etc. – and especially those whose non-execution could produce a legal effect (i.e., a penalty, a statute of limitation or a forfeiture of right).

Article 1 of the Ordinance defines a specific period of time

Article 1 of the Ordinance on Deadlines provides for a special period from March 12, 2020 until one month after the date of termination of the state of health emergency (the “Health Emergency Period”) – i.e., from March 12, 2020 to June 24, 2020, as the current scheduled date for the end of the state of health emergency is May 24, 2020.

Article 10 of the Ordinance on Deadlines is specific to Tax framework

Article 10 of the Ordinance on Deadlines, specific to Tax framework, notably provides:

  • A suspension of the statute of limitation. For any period or fiscal year for which the statute of limitation on the right to reassess was to be reached on December 31, 2020, this deadline will be extended for a period equal to the above-mentioned Health Emergency Period;
  • A suspension of all time limits for tax audits and other research conducted by the French tax authorities in relation to tax audits. This measure applies to both French taxpayers and the French tax administration for a period equal to the Health Emergency Period. In other words, all applicable deadlines for decision-making by the French tax authorities are suspended for the duration of the Health Emergency Period.

This suspension of time limits also covers deadlines applicable to tax ruling requests.

The Ordinance on Deadlines also provides for the suspension of certain time limits as, for example, those under which an administrative approval can be considered given in the silence of the French tax authorities.

It must be noted that deadlines that expired before March 12, 2020 are not postponed. Deadlines that expire after June 24, 2020 are neither suspended nor extended.

It is important to keep in mind that annual income tax returns are not covered by this measure and will therefore have to be filed on time by taxpayers.

It is likely that further government orders will be issued in the coming days to support the business and maintain liquidity during the mandatory lockdown of Covid-19.

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