Non-Resident Tax Service Not Fit for Purpose
Tuesday 02 June 2015
The tax service provided to non-residents is poor and the level of tax control unsatisfactory, says the French national audit office.
Owners of second homes who rent out their property in France will be familiar with the Service des Impôts des Particuliers Non Résidents (SIP-NR) based at Noisy-le-Grand, a suburb east of Paris.
This division of the French tax office is responsible for managing the income tax declarations of non-residents with French sourced income, as well as the wealth tax declarations for those with assets in France that make them liable for the tax.
The service is responsible for over 1.6 million French citizens who live abroad, as well as foreign individuals with income and assets in France.
Earlier this month,the Cour de Comptes published a report highly critical of tax officials at the Noisy offices.
The report criticised "la faible qualité des services rendus" as well as "l'insuffisance du recouvrement et des contrôles réalisés sur les impôts dus par ces contribuables."
The auditors stated one of the main causes of the problem was legislation that was too complex and uncertain and subordinate implementing regulations that took too long to be published.
Service Standards
In an assessment that many readers of this Newsletter will share, the auditors state that the telephone service was "frequently saturated", with only 25% of calls on average being treated by officials. The service had a reputation of simply not responding to calls from non-residents and that the recall service was rarely used.
Their handling of written enquiries was only marginally better. The report says that officials received around 100,000 e-mails each year (a figure that rose to 140,000 in 2013 due to the dispute over social charges), but less than one in two of these mails were dealt with in the 5 day service standard that had been set, and there was at times in excess of 10,000 answered mails.
They also considered the e-mail system not adapted for handling the sometimes voluminous documents that individual taxpayers needed to send for their tax assessment.
The auditors "deplored" the weakness of information provided to non-residents on the law and regulations to assist them in dealing with their tax affairs in France.
Controls
The auditors criticised the lack of controls on the income and assets of non-residents, with a level of tax recovery they considered to be "insufficient".
The report pointed out that only 200,000 non-residents declared income in France, and only 6,000 who made a wealth tax declaration, figures they considered to be low in relation to the total number of French and foreign nationals living abroad with income and assets in France.
The level of debt recovery over two years of taxes owed by non-residents was only 55%, well below the 75% figure that applied for residents of France.
The report highlighted the low level of verification of tax returns by non-residents, with only 4,000 returns (2% of all non-resident returns) being examined by officials to ensure they were correct or actually submitted (contrôles sur pièces), and only a handful of actual investigations (contrôles externes) being launched, mainly due to the logistical difficulties of carrying out such investigations.
Government Response
In response to the report the Minister of Finance, Michel Sapin, stated that the criticism was in part shared by him, but that aspects of the report were already out of date.
In particular, that improvements have already been introduced to the e-mail service to enable documentation to be more easily sent to the tax office, and that improvements in the quality of the telephone service would be implemented by 2016.
In addition, next year there would be new dedicated web pages for international taxpayers that would be in both French and English.
He considered that the report failed to take full account of the strongly diverse nature of the client base of the division, whose only common factor was the payment of taxes.
On tax recovery, the Minister seemed less sanguine, stating little more than "le constat sur ce point est globalement partagé", pointing out the frequent legal and administrative difficulties in the way of tighter controls.
This division of the French tax office is responsible for managing the income tax declarations of non-residents with French sourced income, as well as the wealth tax declarations for those with assets in France that make them liable for the tax.
The service is responsible for over 1.6 million French citizens who live abroad, as well as foreign individuals with income and assets in France.
Earlier this month,the Cour de Comptes published a report highly critical of tax officials at the Noisy offices.
The report criticised "la faible qualité des services rendus" as well as "l'insuffisance du recouvrement et des contrôles réalisés sur les impôts dus par ces contribuables."
The auditors stated one of the main causes of the problem was legislation that was too complex and uncertain and subordinate implementing regulations that took too long to be published.
Service Standards
In an assessment that many readers of this Newsletter will share, the auditors state that the telephone service was "frequently saturated", with only 25% of calls on average being treated by officials. The service had a reputation of simply not responding to calls from non-residents and that the recall service was rarely used.
Their handling of written enquiries was only marginally better. The report says that officials received around 100,000 e-mails each year (a figure that rose to 140,000 in 2013 due to the dispute over social charges), but less than one in two of these mails were dealt with in the 5 day service standard that had been set, and there was at times in excess of 10,000 answered mails.
They also considered the e-mail system not adapted for handling the sometimes voluminous documents that individual taxpayers needed to send for their tax assessment.
The auditors "deplored" the weakness of information provided to non-residents on the law and regulations to assist them in dealing with their tax affairs in France.
Controls
The auditors criticised the lack of controls on the income and assets of non-residents, with a level of tax recovery they considered to be "insufficient".
The report pointed out that only 200,000 non-residents declared income in France, and only 6,000 who made a wealth tax declaration, figures they considered to be low in relation to the total number of French and foreign nationals living abroad with income and assets in France.
The level of debt recovery over two years of taxes owed by non-residents was only 55%, well below the 75% figure that applied for residents of France.
The report highlighted the low level of verification of tax returns by non-residents, with only 4,000 returns (2% of all non-resident returns) being examined by officials to ensure they were correct or actually submitted (contrôles sur pièces), and only a handful of actual investigations (contrôles externes) being launched, mainly due to the logistical difficulties of carrying out such investigations.
Government Response
In response to the report the Minister of Finance, Michel Sapin, stated that the criticism was in part shared by him, but that aspects of the report were already out of date.
In particular, that improvements have already been introduced to the e-mail service to enable documentation to be more easily sent to the tax office, and that improvements in the quality of the telephone service would be implemented by 2016.
In addition, next year there would be new dedicated web pages for international taxpayers that would be in both French and English.
He considered that the report failed to take full account of the strongly diverse nature of the client base of the division, whose only common factor was the payment of taxes.
On tax recovery, the Minister seemed less sanguine, stating little more than "le constat sur ce point est globalement partagé", pointing out the frequent legal and administrative difficulties in the way of tighter controls.
Related Reading:,
Thank you for showing an interest in our News section.
Our News section is no longer being published although our catalogue of articles remains in place.
If you found our News useful, please have a look at France Insider, our subscription based News service with in-depth analysis, or our authoritative Guides to France.
If you require advice and assistance with the purchase of French property and moving to France, then take a look at the France Insider Property Clinic.
