What should a foreign company do when it receives an audit notice or a request for justification from the French tax authorities? That letter opens a framed procedure, with its own deadlines and rights. The first few days are decisive: they shape how the audit is organised, the quality of your first replies and, often, the tone of the exchanges that follow.
This article explains how to identify the nature of the procedure, the five reflexes to adopt, your rights and the steps that come next. It is particularly relevant for companies that use a French VAT agent for their VAT returns.
Identify the nature of the procedure
A request for information is not an audit: it calls for a precise reply but does not give the same safeguards. A notice of accounting audit, on the other hand, announces an on-site or remote audit, specifies the taxes and periods covered, and must come with the charter of the rights and obligations of the audited taxpayer.
| Letter received | What it means | First reflex |
|---|---|---|
| Request for information or justification | One-off request, no on-site audit opened | Reply precisely, within the stated deadline |
| Notice of accounting audit | Announced audit, taxes and periods specified | Organise the response and gather documents |
| Reassessment proposal | Proposed adjustments, notified with reasons | Analyse and reply in writing within the deadline |
The five right reflexes
- Forward the letter immediately to your finance department and to your agent.
- Note the key dates: first visit, periods under audit, reply deadlines.
- Appoint a single contact for exchanges with the auditor.
- Gather the documents: returns, general ledgers, the accounting entries file, invoices, contracts.
- Review known risk areas upfront, so you do not discover them during the audit.
Your rights during the audit
You may be assisted by an adviser of your choice, obtain explanations on the proposed adjustments, reply in writing to the reassessment proposal and, in case of disagreement, request a hierarchical appeal.
The accounting entries file
When accounts are kept electronically, the company must hand the auditor a standardised file of its accounting entries. For a foreign company whose accounts are kept under other standards, producing it needs to be anticipated: a non-compliant file can be penalised.
It is therefore prudent to check, well before any audit, that your accounting system can produce this file in the expected format.
After the audit
If adjustments are considered, they are notified in a reasoned reassessment proposal. You then have a period, in principle thirty days and extendable on request, to submit your observations. This is a decisive step that deserves a reasoned, documented reply.
How Hanoutax can help
Hanoutax assists you throughout the procedure, within its mandate before the tax authorities: preparing documents, answering requests and analysing reassessment proposals. Where a legal question warrants it, we work with a tax lawyer. See our tax audit assistance service and our fiscal representative France page.
FAQ
What is the difference between a request for information and a tax audit?
A request for information calls for a precise reply but does not give the same safeguards as an audit. A notice of accounting audit announces an on-site or remote audit, specifies the taxes and periods covered and comes with the audited taxpayer’s charter.
Can I be assisted during an audit?
Yes. You may be assisted by an adviser of your choice, obtain explanations on the proposed adjustments, reply in writing to the reassessment proposal and, in case of disagreement, request a hierarchical appeal.
What is the accounting entries file?
When accounts are kept electronically, the company must hand the auditor a standardised file of its accounting entries. For a foreign company, producing it should be anticipated, because a non-compliant file can be penalised.
How long do I have to reply to a reassessment proposal?
In principle thirty days, extendable on request. It is a decisive step: the reply must be reasoned and documented. The exact period is stated in the proposal you receive, which should be read as soon as it arrives.
Who should be told first when an audit notice arrives?
Forward the letter immediately to your finance department and to your agent, then note the key dates and appoint a single contact for exchanges with the auditor.
Received an audit notice or a request from the authorities?
Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
