As you may know, the French tax law and doctrine requires that any taxpayers in France provide with a specific VAT audit trail documentation in case of tax audit.
From now, such requests were usually applied by the FTA to the French based companies.
However, since couple of months, it can be seen an expansion of such VAT audit trail documentation requests to taxpayers in France not established but only VAT registered.
In practice, you will find HERE a new example of a questionnaire received by one of our clients as part of a VAT/IT tax audit including a request for communication of the VAT audit trail documentation according to the provisions of the Directive 2010/45/EU.
Specific questions about VAT declarative processes (VAT return/Intrastat/EC Sales List for services), the VAT set-up/configuration in your ERP and cash registration systems, and the presentation of tax e-invoicing schemes (Paper, PDF, simple or qualified signature, simple EDI, full EDI / tax) are also raised.
These requests and questions again demonstrate the current desire of tax inspectors to determine the “original” invoices issued and received as well as the reality of the purchases / sales operations by the demonstration and establishment:
- (i) Processes / P2P, Sales / O2C, Repository Management (Customers / Suppliers / Items) and VAT Declarations (CA3, DEB, DES) secured,
- (ii) an appropriate tax / VAT governance.
The questionnaire are generally received by the company before or during the 1st meeting with the Tax Administration. The time allowed by the Administration to produce this information is, in this case, only 20 days.
Remember that in the absence of answers or communication of the necessary information, the tax / VAT risks incurred by companies are numerous:
- Filing of a PV deficiency filing an opposition to tax control registered in the companies’ file
- Application of various penalties depending on omissions (mentions on invoices: € 15 / error observed (times the number of invoices issued during the years checked), interest on late payment, deliberate failure of 40%, 80% fraudulent activity)
- Questioning the right to deduct purchase invoices
- Until the pure and simple rejection of accounting in the absence of proper retention of accounting data / billing / management or the evidence of transactions (contracts, purchase orders, delivery notes, tickets cash register, proof of transport, proof of receipt of goods / services or payment, etc.), in accordance with the tax regulations regarding PAF / TVA and CFCI.
If you have any questions, please feel free to contact José Manuel Moreno, Partner PwC France on +33 (0) 1 56 57 43 81 or firstname.lastname@example.org or Laurent Poigt, Director PwC France on +33 (0) 1 56 57 77 54 or email@example.com
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