Obligations & penalties

Penalties and sanctions without a tax representative in France

Failing to appoint a tax representative when it is mandatory exposes you to heavy financial penalties and can block a property sale. Here is what you actually risk.

VAT-related penalties

For companies established outside the European Union carrying out taxable transactions in France, appointing an accredited tax representative is a legal obligation under Article 289 A of the French General Tax Code (CGI). Failure to comply with this obligation constitutes a sanctionable tax offence.

In practice, the tax authority may carry out a reassessment covering the entire turnover generated in France over the period not covered by proper fiscal representation. This reassessment includes uncollected or unremitted VAT, plus late interest and penalties.

Key point The mere absence of VAT registration — made impossible without a tax representative for non-EU companies — is sufficient to establish the breach. The authority does not need to demonstrate fraudulent intent to apply the basic surcharges.

Blocking of a property sale

For non-resident individuals and foreign companies, the sale of real estate in France is the primary situation where the absence of a tax representative has direct and immediate consequences. The rule is set out in Article 244 bis A of the CGI:

  • If the net capital gain on the sale is €150,000 or less, using an accredited tax representative is not legally mandatory (though often required by notaries in practice).
  • If the net capital gain exceeds €150,000, appointing a DGFiP-accredited tax representative is mandatory. Without one, the notary cannot conclude the sale.

If a sale is completed without a representative when the obligation applies, the notary incurs personal liability. Professional practice is therefore to systematically block the deed until the situation is regularised. This blockage can last several weeks and cause the transaction to collapse.

Concrete example An American national sells their apartment in Lyon for €450,000. After length-of-ownership allowances, the net capital gain amounts to €210,000. The week before signing, the notary notifies them that they cannot proceed without an accredited tax representative. The seller must urgently find a professional, delaying the sale by 3 weeks.

Surcharges and late interest

Beyond the operational blockage, the financial penalties for a tax breach can be considerable. Here are the main ones:

  • Late interest: 0.20% per month (i.e. 2.40% per year) on the amount of duties not paid by the legal deadline.
  • 10% surcharge: applicable in the event of late payment or late filing of a return.
  • 40% surcharge: penalises deliberate non-compliance, i.e. when the authority demonstrates that the taxpayer was aware of their obligation and chose not to fulfil it.
  • 80% surcharge: in the event of fraudulent conduct, concealed activity, or abuse of law.
  • Fine of €10,000 to €50,000: for failure to declare foreign bank accounts or trusts.
Type of breachPenalty
Late filing or payment10% + interest at 0.20%/month
Deliberate non-compliance40% + interest
Fraudulent conduct80% + interest
Concealed activity80% + 10-year reassessment period

How to regularise your situation

If you have identified a past breach — carrying out taxable activity without a tax representative, failure to declare rental income, an undeclared sale — it is always possible to regularise your situation, and doing so voluntarily is far preferable to waiting for a tax audit.

Voluntary regularisation allows penalties to be minimised: if carried out before any tax audit, only late interest is generally applied, without surcharges. It consists of filing the missing returns, paying the duties owed and, if necessary, retroactively appointing an accredited tax representative for the relevant period.

Watch out Regularisation must be initiated before any formal rectification proposal from the authority. Once the adversarial procedure has been opened, the conditions for contesting penalties become much more restrictive and generally require the involvement of a tax lawyer.

To regularise your situation and secure your future obligations, the first step is to appoint a DGFiP-accredited tax representative. Our list identifies the specialist professionals who can accompany you from the very first step.

Frequently asked questions

The absence of an accredited tax representative, mandatory for non-EU companies, exposes the company to a tax fine of up to 50% of the VAT due, plus late interest of 0.20% per month. In the event of a reassessment, surcharges of 40% (deliberate non-compliance) or 80% (fraudulent conduct) are added.
Yes. When the capital gain on the sale exceeds €150,000, the notary is legally required to ensure that an accredited tax representative is in place before proceeding to sign the authenticated deed. Without this representative, the sale cannot be finalised.
The standard reassessment period is 3 years for VAT and income tax. It is extended to 10 years in the event of fraud or concealed activity. For undeclared foreign bank accounts, the period can reach 10 years since the 2013 law.
Yes. A non-resident individual (expatriate, foreign investor) who fails to comply with their French tax obligations — failure to declare rental income, failure to appoint an accredited tax representative when selling significant real estate — is exposed to the same surcharges and penalties as companies.
Yes. Voluntary regularisation can significantly reduce penalties. When omitted returns are filed before any audit, surcharges are limited to 10% (late interest only if good faith is demonstrated). It is strongly advisable to act before any audit notification is received.
Official sources — impots.gouv.fr — BOFiP — Legifrance — Art. 1727 and 1728 CGI

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