Taxation at the source in France: SMEs have a “right to error”

Understanding ‘Right to error’

Starting in 2019, taxation in France will change slightly. With the new “Taxation at the source”, companies will be taxed on the revenue they generate this year, rather than the year prior. Putting this in place can be a bit difficult at first for smaller structures though; so the French state also introduces a “right to error”.

What does this “right to error mean”?

Of course, implementing this sudden change may be a bit difficult, especially for smaller structures. This is where the right to error comes into play: if you make a mistake when declaring your revenue, or are late when filing your tax returns, you won‘t receive any penalty as long as this was done “in good faith”.

In other words, unless the tax administration proves that you purposefully deceived them, they’ll be lenient if you make a mistake. That is, as long as you have less than 21 employees.

It’s quite the thoughtful measure, all things considered!