France: “Desk” tax audits available under new law | KPMG | GLOBAL
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France: “Desk” tax audits available under new law

France: “Desk” tax audits available under new law

A new “desk” tax audit method was introduced by a provision of the amended (“rectified”) Finance Act for 2016.


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Article 14 of the French Rectified Finance Act for 2016 added new Article L47 AA to the French general tax code. This new measure sets out the procedures for desk tax audits and examination of accounts. For these purposes, an “examination of accounts” may be conducted with respect to any taxpayer: (1) required to keep and present accounting documents; and (2) that maintains its accounting books via computerized systems.

Desk audits

In practice, the French tax administration will consider the type of taxpayer / company and the audit risks. If it is determined that an on-site investigation is not warranted, an examination of accounts may be conducted, based on the files of accounting entries (FAC) submitted by the company. This new type of audit reflects the administration’s effort to enhance efficient use of resources.

The criteria for selecting companies to be subjected to the new desk audit process have not been specified. A general overview of the process is, as follows.

  • An examination of accounts is initiated when a notice is issued to the taxpayer, advising the taxpayer of its right to be assisted by its counsel. 
  • The taxpayer will then be required to send to the tax administration a copy of its FAC files within 15 days after it receives the audit notice. 
  • The FAC files must relate to the year(s) at issue (that is, the years open to audit).
  • The tax administration then will have six months in which to send to the taxpayer either a notice of proposed reassessment, or a notice of no reassessment. 
  • The tax administration may conduct sorting operations, classifications, and calculations needed in order to verify that the data in the FAC files are consistent with the taxpayer’s tax returns or other documents.

Any failure by the taxpayer to submit the FAC files within the 15-day period will be subject to a €5,000 penalty per audited year. This FAC file failure may also trigger a standard, full-fledged tax audit.  

KPMG observation

The FAC files are mandatory for audits that concern tax years beginning on or after 1 January 2014. Thus, the FAC files are viewed as a crucial element for appropriate taxpayer preparation prior to tax audits. Prudent taxpayers will want to anticipate the need for FAC data and conduct regular accounting data consistency tests as well as anticipate consistency testing that may be conducted during a desk audit. 


For more information, contact a tax professional with Fidal* in France:

Laurent Chetcuti | +33 (0) 1 55 68 14 47 |  

Armelle Courtois-Finaz | +33 (0) 1 55 68 16 19 |   


* Fidal is a French law firm that is independent from KPMG and its member firms.

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