Statute of limitations in tax matters: how far back can the tax authorities go?

The statute of limitations sets the period during which the French tax authorities may revisit a situation and claim payment of tax. While the period is generally three years for the main taxes, it may extend to six or ten years in certain situations and may be interrupted or extended by various procedural steps.

Receiving a proposed reassessment covering earlier years often raises the same question: are the tax authorities still entitled to act?

The answer depends on the tax concerned, the filing obligations fulfilled by the taxpayer and the events that may have altered the running of the limitation period.

Several periods serving different functions must also be distinguished: the period available to the tax authorities to assess the tax, the period they then have to collect it, and the period within which the taxpayer may challenge the assessment.

Determining whether a year is time-barred therefore requires the precise chronology of the file to be reconstructed, rather than a single period being applied mechanically.

1. What is the limitation period in tax matters?

How many years back can tax be reassessed?

For income tax and corporation tax, Article L. 169 of the French Tax Procedures Code (Livre des procédures fiscales, LPF) provides that the tax authorities’ right of reassessment may, in principle, be exercised until the end of the third year following the year for which the tax is due.

In practical terms, income received in 2023 and declared in 2024 may be reassessed until 31 December 2026. For both income tax and corporation tax, the starting point is neither the year of the audit nor the year of the return: it is the year for which the tax is due.

Similar time limits apply to several other taxes. VAT, for example, may be reassessed until the end of the third year following the year in which the tax became chargeable. The precise calculation therefore differs according to the nature of the tax and its chargeable event.

It is thus more accurate to speak of the tax authorities’ “right of reassessment” (droit de reprise) than to assert that every tax audit is subject to a uniform three-year limitation period.

The limitation period sets a limit on the tax authorities’ power to reassess: once it has expired, they can no longer, in principle, assess additional tax for the period concerned.

In what cases can the limitation period be extended to six or ten years?

The three-year period is subject to several important exceptions.

For registration duties and the real estate wealth tax (IFI), the three-year period can only be relied on against the tax authorities where the chargeability of the tax has been sufficiently disclosed by the documents filed, without further investigation. Failing that, the subsidiary six-year period under Article L. 186 of the LPF may apply.

The question is of particular importance for inheritance, wealth planning and IFI matters: a return that has been filed does not systematically guarantee the shortest period if it does not enable the tax authorities to identify sufficiently the information required to assess the tax.

In other situations, the right of reassessment may be extended to ten years.

This is the case, under the conditions laid down by law, in particular where there is an undeclared activity. Article L. 169 also provides for extended periods in certain situations involving a fictitious tax domicile abroad or failure to comply with filing obligations relating to certain accounts, life insurance policies, trusts or structures located outside France.

For undeclared foreign accounts, however, the ten-year period applies subject to specific conditions. The law provides in particular for an exception where the taxpayer shows that the total credit balances of the accounts concerned did not exceed 50,000 euros at any time during the year in question.

There is therefore no single limitation period in tax matters: three, six or ten years may apply depending on the tax, the nature of the irregularity and the filing obligations actually complied with.

2. What can interrupt or extend the limitation period?

Does a proposed reassessment interrupt the limitation period?

The imminent expiry of the reassessment period does not mean that the tax authorities must have finally issued the tax for collection before that date.

Article L. 189 of the LPF provides in particular that the limitation period is interrupted by the notification of a proposed reassessment.

The effect is significant: the interruption erases the period that was running and starts a new limitation period of the same nature.

The proposed reassessment must, however, have been duly notified within the period. A proposal merely dated in December is therefore not sufficient if the tax authorities cannot establish that it was validly presented to the taxpayer before the applicable period expired.

Nor is the interruptive effect unlimited. It applies to the taxes and adjustments covered by the notified document, not to any irregularity the tax authorities might discover later.

Other steps may also interrupt the limitation period, in particular certain official reports (procès-verbaux) or conduct by the taxpayer amounting to a sufficiently precise acknowledgement of their tax debt.

Analysing a file that is, or may be, time-barred therefore requires checking not only the years concerned, but also the dates of notification and the exact scope of each step taken.

In which situations do the tax authorities have additional time?

Certain events allow the tax authorities to benefit from special periods even though the ordinary reassessment period would normally have expired.

This may be the case, for example, where the tax authorities seek the assistance of a foreign tax authority, where a judicial investigation takes place under certain conditions, or where omissions are revealed in the course of court proceedings or a formal tax claim.

Since the amendments made in 2026, Article L. 188 C of the LPF allows in particular certain omissions revealed by judicial proceedings, proceedings before the administrative courts or a formal tax claim to be remedied until the end of the second year following that of the decision ending the proceedings, subject to a limit of the tenth year following the year for which the tax is due.

This mechanism explains why filing a formal tax claim should not be considered solely from the angle of the assessment the taxpayer wishes to challenge.

A claim may, in certain circumstances, reveal to the tax authorities an underpayment relating to another period or another item and allow them to benefit from a special period in which to act.

This option is not, however, unlimited: the irregularity must genuinely have been revealed by the proceedings or the claim. The tax authorities cannot, in principle, rely on this mechanism to reopen artificially a situation for which they already had the necessary information before the normal period expired.

The limitation period must therefore always be assessed in the light of the events that have occurred throughout the life of the tax file.

3. Limitation of assessment, collection and claims: which periods must not be confused?

What are the different types of limitation period in tax matters?

The limitation of the right of reassessment must not be confused with the limitation of collection.

The right of reassessment concerns the tax authorities’ ability to correct an underpayment and assess additional tax.

Once the tax has been duly assessed, another period begins: the period during which the public accounting officer may enforce payment.

Article L. 274 of the LPF provides, in principle, for a four-year period from the issue for collection of the tax roll or the dispatch of the enforceable instrument, subject to grounds for interruption or suspension.

It is therefore entirely possible for the tax authorities to be unable to assess new tax for an earlier year, while still retaining the right to enforce payment of tax duly assessed before the reassessment period expired.

Conversely, the age of a tax debt is not in itself sufficient to conclude that it is time-barred. It must be established whether collection steps, acknowledgements of debt, a stay of payment or other events have interrupted or suspended the period.

Criminal matters are governed by yet different rules. The period within which prosecution for tax fraud may be brought is therefore distinct from both the tax authorities’ right of reassessment and the limitation of collection.

What is the time limit for challenging an assessment with the tax authorities?

The limitation period also protects the taxpayer, but the taxpayer must in turn comply with the time limits for filing a formal tax claim.

For most taxes other than local direct taxes, Article R. 196-1 of the LPF provides, in principle, that the claim must be filed no later than 31 December of the second year following that of the issue for collection, the payment of the tax or the event giving rise to the claim.

Local direct taxes are subject to a shorter period, set in principle at 31 December of the year following that of the event that starts the period running.

A particularly useful rule applies where the taxpayer has been subject to a reassessment procedure: Article R. 196-3 of the LPF then gives them a period equal to the one available to the tax authorities to exercise their right of reassessment.

Before concluding that a challenge is out of time, it is therefore essential to identify the applicable period and to check whether a reassessment procedure may have opened a special period.

Likewise, where a claim has been expressly rejected, the taxpayer must then comply with the time limit for bringing the matter before the court. In principle, this is two months from the due notification of the rejection decision.

The analysis of the limitation period is thus never reduced to the mere number of years that have elapsed. It requires identifying the tax concerned, the starting point of the period, the steps that may have interrupted or extended it and any special rules applicable to the taxpayer’s situation.

The involvement of a tax lawyer makes it possible in particular to reconstruct this chronology, to check the validity of the interruptive steps relied on by the tax authorities and to identify the years or taxes that can no longer be reassessed.

Based in Nice, the Valenor firm assists private individuals and businesses facing limitation issues in tax matters, whether checking the tax authorities’ right of reassessment, the limitation of collection or the time limits for challenging an assessment.

Our objective is to identify precisely the periods applicable to each situation, to check whether the tax authorities are still entitled to act and, where the limitation period has expired, to give full effect to that time bar in the taxpayer’s defence.

Bruno Gherardi
Tax lawyer in Nice - Cabinet Valenor