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France: The 50% fine for lack of invoicing finally censored
The French Constitutional Council has just censured the provisions of article 1737, I, 3° of the French Tax Code (FTC) [1] on the failure to issue an invoice [2].
The French Constitutional Council has just censured the provisions of article 1737, I, 3° of the French Tax Code (FTC) [1] on the failure to issue an invoice [2].
For the record, these provisions impose a tax fine of 50% of the amount of the transaction on a supplier liable for French VAT for not issuing an invoice. If the supplier provides, within thirty days of the formal notice sent by the French tax authorities, proof that the transaction has nevertheless been properly accounted for, the fine incurred is reduced to 5% of the amount of the transaction.
On the substance, the Constitutional Council ruled that the contested provisions disregarded the principle of proportionality of penalties, by being able to give rise to a penalty that is manifestly disproportionate with regard to the seriousness of the breach observed, as well as to the advantage that may have been gained from it…
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