Late payment interest and penalties waived on French inheritance tax

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Are you late in submitting your French inheritance tax return and paying French inheritance tax due to the COVID-19 outbreak? Good news! The French tax authorities have waived all late payment interest and penalties during the emergency period.

The French tax authorities have regularly updated the section of the BOFIP (official tax bulletin) which details the mitigation measures in response to delays caused by COVID-19 to individuals and companies in fulfilling their tax obligations. The latest update on 24 June provides welcome news for those who were unable to submit their French inheritance tax returns in time, especially as the initial emergency Decrees clearly stated that the various suspensions of administration obligations did not suspend any tax obligations.

As a reminder, under French tax law the inheritance tax return and any inheritance tax due must be submitted within six months of the date of death for estates where the deceased died in France (irrespective of domicile), or within 12 months of the date of death where the deceased died overseas. If the deadline is missed, then late payment interest will start running (the current rate is 0.2% per month late, increasing to 0.4% per month late from January 2021) and a fixed penalty of 10% of the tax due will apply after the twelfth month has passed.

In a new “II” section, the latest BOFIP update states that all French inheritance tax returns submitted late during the French emergency period (which ran from 12 March to 23 June 2020) will automatically be exempted from the late payment interest and penalty. For tax returns submitted outside of those dates, there is still the opportunity to apply for a waiver of the penalties under the general rules, but this remains at the discretion of the French tax authorities.