Penalties and how to contest a bill

If you fail to make a declaration when eligible to do so you may be penalised. Tax offices sometimes make random checks or act based on factors such as income levels and lifestyle.

If in a given year you wrongly failed to declare for wealth tax or you excluded important items, the tax office may carry out checks and reassess your taxation for that year until the end of the sixth year afterwards.

This is as opposed to a standard three years where they merely suspect a mistake in a valuation was made. This rises to 10 years in the case of undeclared property abroad.

Non-declaration also poses a risk of taxation d'office, where the tax office taxes you based on its own estimates, using available information on your taxes, past declarations, lifestyle etc (to which will be added interest and penalty payments).

If you declare late, interest of 0.2% is charged per month (starting from July 1) plus a penalty of 10% of the IFI due or 40% if you pay more than 30 days after receiving a formal payment demand.

A 40% penalty is also applied where a late declaration is made after undeclared wealth outside France comes to light.

People are sometimes caught out for under-declaring, for example, by grossly undervaluing their home. Estimating your property wealth is not an exact science but your total must be reasonable. A leeway of up to 10% off a correct value is reported to be tolerated.

If your declaration is found to be imprecise or incomplete (i.e. certain assets left out), the same interest as for a late declaration may apply. However, it will not be due if you included a note at the time of declaration giving reasons for not declaring certain assets or explaining your valuation.

In all cases, penalties may be increased if the tax office has reason to believe items were left out or undervalued deliberately. In serious cases, you may be additionally banned from IFI tax reductions such as for gifts to good causes for up to three years.

A 10% penalty is also levied if you pay your tax after the deadline date given on your bill.

If necessary, you may request from the tax office extra time to pay, however applications to have the tax cancelled or reduced are not accepted. You will need to give reasons.

If you wish to contest the amount of your bill, or how it was calculated, you should make a réclamation (complaint), for example via the secure message service in your account at impots.gouv.fr. Other avenues to look into include applying for mediation from the conciliateur service for your tax office.