Tax regularisation

Tax regularisation in France for non-residents: where to start?

You have undeclared French income, unpaid VAT, or an improperly managed property sale? It is possible to regularise your situation before an audit is triggered. Here is how to proceed.

Why regularise voluntarily?

Voluntary tax regularisation — initiated on your own initiative, before any audit notification — is systematically more advantageous than waiting for a reassessment. The French tax authority draws a clear distinction between the good-faith taxpayer who corrects their errors and the taxpayer who holds out to the end.

In concrete terms, voluntary regularisation means paying only late interest (0.20% per month on duties owed) without the 40% or 80% surcharges applicable in cases of deliberate non-compliance or fraud. On significant amounts, this represents a considerable saving. Moreover, a well-conducted regularisation definitively closes the period in question and provides protection against a future audit covering those years.

Authority's reassessment period The authority can in principle go back 3 years for direct taxes and VAT. This period is extended to 6 years where fraud is suspected and to 10 years for concealed activities. Regularising promptly therefore limits the period at risk.

The most common situations requiring regularisation

Non-residents most commonly find themselves in breach in the following cases:

  • Undeclared rental income: rents received from property located in France, not reported on form 2044 NR or 2042 NR. A common situation among expatriates who were unaware of their reporting obligation.
  • Uncollected French VAT: non-EU company that sold in France without a tax representative or VAT registration. This particularly affects non-resident e-merchants using logistics warehouses in France.
  • Undeclared real estate capital gain: sale of property in France without declaring the capital gain or appointing an accredited tax representative, where the notary did not withhold the amount at source.
  • Undeclared foreign bank accounts: obligation to declare via form 3916 any account held abroad, even if inactive.

Steps to a successful regularisation

A structured regularisation involves several essential steps:

  • Step 1 — Diagnosis: precisely identify the obligations not fulfilled (periods, types of tax, estimated amounts). A tax representative or tax lawyer can help you map your situation.
  • Step 2 — Gathering supporting documents: collect all necessary documents (notarial deeds, rent receipts, bank statements, sales and purchase invoices depending on the nature of the regularisation).
  • Step 3 — Appointing an accredited tax representative (if relevant for VAT): the representative handles the corrective returns or the missing initial returns.
  • Step 4 — Filing returns: the missing returns (CA3 for VAT, 2044 NR for rental income, 2048-M for real estate capital gains) are filed with the relevant office.
  • Step 5 — Payment of duties and interest: settlement of duties owed and late interest accompanies the filing of returns. A good-faith explanatory letter may be attached.
Concrete example A Canadian company stored and sold goods in France for 2 years without VAT registration. It appoints an accredited tax representative who reconstructs the taxable turnover for the period, files corrective CA3 returns for each quarter and settles the VAT owed plus late interest. The authority validates the regularisation without additional penalty, recognising the good faith of the approach.

Reduced penalties in cases of good faith

The penalty regime in the case of voluntary regularisation is significantly more favourable than in the case of an imposed reassessment. Here are the applicable rules:

  • No surcharge: if regularisation is carried out before any audit and duties are paid within the timelines set by the tax office, only late interest (0.20% per month) is owed.
  • 10% surcharge: applicable when the return is filed voluntarily but outside the legal deadline and without simultaneous payment.
  • Possible partial remission: in certain cases (proven financial difficulties, first offence), a clemency request to the Director of Public Finances may result in a partial remission of interest or penalties.
Watch out A regularisation filed after receipt of a notice of personal tax review (ESFP) or a notice of accounting audit is no longer considered voluntary. Surcharges of 40% or 80% then apply depending on the nature of the breach identified.

To manage your regularisation under the best possible conditions, call on a DGFiP-accredited tax representative. Our list allows you to quickly identify professionals available for urgent procedures.

Frequently asked questions

Yes. It is possible to file VAT returns for previously undeclared periods, within the authority's reassessment period (3 years in principle, 10 years in the event of fraud). Voluntary regularisation, carried out before any audit, limits penalties to late interest only.
For non-resident individuals wishing to declare omitted rental income, using a tax representative is not always formally mandatory but is strongly recommended. The representative is familiar with the specific forms (2044 NR, 2042 NR) and can interact directly with the Non-Residents Tax Office on your behalf.
A voluntary regularisation does not automatically trigger a tax audit. The authority generally accepts good-faith regularisations without launching an in-depth review. The risk of an audit is far higher if you do nothing and inconsistencies appear in your returns or those of third parties (notaries, platforms, banks).
The documents vary depending on the type of income: for rental income, rent receipts, expense statements, and works receipts are required. For a real estate capital gain, the purchase deed and sale deed are essential. For VAT, sales and purchase invoices for each relevant period.
The cost depends on the amount of duties owed, the applicable penalties, and the fees of the tax representative or adviser engaged. In the case of voluntary regularisation, only late interest (0.20% per month) is added to the duties. Tax representative fees are generally calculated on the amount of VAT declared or on a fixed annual basis.
Official sources — impots.gouv.fr — BOFiP — Legifrance — Art. 1727 CGI

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