The customs statute of limitations has been extended in France
The last Amending Finance Bill for 2015 has abruptly aligned the French statute of limitations on the new Union Customs Code (UCC) that will enter into force as from May 1st, 2016.
Traditionally, France had a 3-year statute of limitations in customs matters. But despite Article 103 of the UCC providing for a general 3-year period, this does not apply when the customs debt has been incurred as a result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, in which case, the 3-year delay is extended to a minimum of 5 years and to a maximum of 10 years in accordance with national law.
In France, any breach of customs rules automatically qualifies a criminal infraction which may give rise to criminal court proceedings. Only the customs practice distinguishes between bona fide businesses and true fraudsters.
The Amending Finance Bill does not only provide for a 5-year statute of limitations for omissions or unpaid customs duties at import or export, but also for a 10-year period for collection of customs duties and taxes on omissions or insufficient declarations, revealed by any court procedure.
Therefore, the last Amending Finance Bill for 2015 has escalated the risk of longer statute of limitations for bona fide businesses and also potential retroaction of past periods not yet barred by the previous 3-year delay.
In essence, the new legislation aggravates the situation of bona fide taxpayers by bringing the statute:
- From 3 to 5 years for customs debts incurred as the result of an act giving rise to criminal proceedings
- From 3 to 10 years for duties and taxes debts revealed during a preliminary investigation, “flagrancy” or criminal proceedings initiated by the public Prosecutor.
This new legislation triggers many uncertainties for operators, especially concerning the respective scopes of the different statutes of limitations and also the potential for retroaction to past facts post May 1st, 2013 or for any “hidden” activity which could be revealed under the 10-year window.
It has been confirmed that the 3-year delay will only apply to excise taxes and to national taxes (VAT, environmental and indirect taxes) collected by customs, whereas, the true customs duties will be subject to the 5-year statute. Also, rules on archiving and penalties do not match with the new statute as they remain subject to a 3-year statute.
Operators are invited to review their past transactions to ensure that they would not be disfavored as a result of these longer statutes of limitations.
|Odile Courjon||Vanessa Irigoyen|
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