A forgotten invoice, a wrong rate, a transaction reported in the wrong period: filing errors are common, especially for a company new to French rules. The good news is that they can be corrected. The bad news is that the longer you wait, the more the correction costs.
For a foreign company with a VAT registration in France, VAT returns should be made reliable as soon as an anomaly is spotted. Here is how to proceed.
Correcting voluntarily: an encouraged approach
French law clearly distinguishes a good-faith mistake corrected voluntarily from one discovered during an audit. The “right to make mistakes” allows a return to be corrected without penalty and with reduced late-payment interest, provided you act before any intervention by the tax authorities.
How this applies in practice depends on the facts (good faith, nature of the mistake) and should be checked for each file.
The two ways to regularise
- On a later return: most omissions of collected or deductible VAT can be regularised on a following return, in the lines provided for that purpose, with an explanatory note.
- By a claim: when the mistake led you to pay too much VAT, a claim allows you to obtain a refund, within a period that generally runs until the end of the second year following payment.
Waiting for an audit: the cost of inaction
A mistake spotted by the tax authorities leads to full late-payment interest and, depending on the case, surcharges. It may also lead the auditor to extend investigations to other periods. Penalties are detailed in our article VAT penalties, late-payment interest and surcharges.
The mistakes most often corrected
| Mistake | Effect on VAT |
|---|---|
| Forgotten reverse charge on services bought from a foreign supplier | Collected and deductible VAT to report |
| Exempt intra-EU supply without a valid customer VAT number | Exemption open to challenge |
| VAT deducted on an expense excluded from the right to deduct | Deduction to be repaid |
| Credit notes not taken into account in collected VAT | Collected VAT overstated |
Several of these mistakes also appear on the recapitulative statement: see the mistakes that cost you.
Building the correction file
Before filing a correction, gather the elements that explain the mistake and its quantification. A clear file eases any exchange if the tax authorities ask questions.
- the periods concerned and the amount of VAT at stake for each;
- the invoices, credit notes and exemption evidence for the corrected transactions;
- an explanation of the cause and of the measures taken to avoid a repeat;
- a reconciliation with other returns (CA3, recapitulative statement) to avoid inconsistencies.
Depending on the case, a correction may also call for regularising related returns. The exact procedure should be confirmed for your situation.
A three-step method
The third step is often neglected. Yet a repeated mistake almost always points to a process issue: invoicing software set-up, no check of VAT numbers, or a monthly close that is too rushed. A regular review, for instance each quarter, catches these drifts before they build up.
How Hanoutax can help
Hanoutax, a French VAT agent acting as mandataire fiscal, quantifies the impact of the mistake, prepares the suitable regularisation and supports you in your exchanges with the tax authorities. We act as an agent, which differs from a fiscal representative in France: see this page.
Discover our corrective returns service. This content is informative and is not personalised legal advice.
FAQ
Can a VAT return be corrected without penalty?
The “right to make mistakes” allows correction without penalty and with reduced late-payment interest, provided you act before any tax authority intervention. Application depends on your situation.
How do I correct an omission of VAT?
Most omissions can be regularised on a following return, in the lines provided, with an explanatory note.
What if I paid too much VAT?
A claim allows a refund, within a period that generally runs until the end of the second year following payment.
What happens if the tax authorities find the mistake?
Full late-payment interest, sometimes surcharges, and a risk that checks extend to other periods.
Do I still have to file a nil return?
Yes, even with no transactions the return remains due: see our article on the CA3 and CA12.
A mistake to correct?
Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
