TLDR: To regularize omitted income, use spontaneous regularization with reduced late payment interest, regularization during an audit with a 30% reduction in interest, or an amended VAT return. Procedures vary depending on the type of tax and the taxpayer's good faith.
Regularization procedures
To regularize omitted income in a previous tax return, you can use three main procedures:
- Spontaneous regularization: This procedure allows a reduction of up to 50% in late payment interest. It applies to errors or omissions made in good faith.
- Regularization during an audit: Under Article L. 62 of the Livre des Procédures Fiscales (LPF), this procedure allows a 30% reduction in late payment interest for good faith errors.
- Amended return: For VAT, you must file an amended electronic return, explicitly marked as such and referencing the relevant tax period.
Conditions and reductions
Spontaneous regularization is possible to correct omissions or errors in previous returns, with significant benefits in terms of reduced late payment interest. For example, if a property was omitted from an Impôt sur la Fortune Immobilière (IFI) return, you can benefit from a 50% reduction in interest if the omission is regularized before the tax authority initiates an audit.
The regularization procedure during an audit (Art. L. 62 LPF) is available even if supplementary declarations (such as Form 2042-C for foreign income) were not filed on time, provided the main return (Form 2042) was submitted by the deadline.
Penalties and exclusions
Certain omissions may result in criminal penalties, such as a €4,500 fine and five years' imprisonment for undeclared foreign income exceeding 1/10 of total taxable income or €153 (Art. 1772 CGI). The regularization procedure does not apply if the omission was fraudulent or if the main return was not filed at all.
Declarative obligations
All taxpayers subject to income tax in France, including officials of international organizations such as CERN, must declare all income, even if exempt or taxed abroad. Article 170 of the Code Général des Impôts (CGI) requires all taxable individuals to declare all income, including that not taxable in France.
VAT procedure
To regularize VAT omissions, you must file an amended electronic return, explicitly marked as such and clearly referencing the tax period affected by the omission. The declaration must be unambiguous.
Regularization of employment income
Under Article 1736 of the CGI, you can regularize the last three years without penalties if it is the first regularization request, if the omitted remuneration was declared by the beneficiaries within the legal deadlines, and if the administration can verify the accuracy of the justifications provided.
Terms and conditions
The deadlines for correcting an omission vary depending on the tax and the chosen procedure. For income tax (IR), the error must be corrected before the end of the year following the payment of the amounts in question. For VAT, the amended return can be filed at any time, provided the reference period of the omission is clearly indicated.