The French Constitutional Council was asked to rule on whether the 15-euro tax fine for omissions or inaccuracies in an invoice complied with the principle of proportionality of penalties set out in the Declaration of the Rights of Man and of the Citizen. The Constitutional Council answered this question in the negative, stating that the said penalty does not contravene the principle of proportionality of penalties.
Transmission of the QPC to the Conseil constitutionnel
In a ruling handed down on April 14, 2023, the Conseil d'Etat referred a question prioritaire de constitutionnalité to the Conseil constitutionnel concerning the validity of the provisions ofarticle 1737, II of the French General Tax Code (CGI). This article stipulates that any omission or inaccuracy in an invoice or document is subject to a fine of 15 euros. However, the total amount of fines due for each invoice or document is limited to a quarter of the amount that should have been mentioned.
For example, omissions or inaccuracies concerning :
- invoice date or number,
- the name of the vendor or service provider,
- the precise name,
- unit price excluding tax,
- the applicable VAT rate,
- VAT identification numbers of seller and buyer.
In this case, a company was subject to an accounting audit for the 2015 and 2016 financial years, following which the tax authorities imposed a fine on the basis of article 1737, II of the CGI. The company in question appealed the decision, arguing that this provision was contrary to the principle of proportionality of penalties. More specifically, the decision states that the 15-euro fine for any omission or inaccuracy in an invoice cannot be applied cumulatively insofar as the breach is not intentional and does not result in any financial loss for the Treasury.
In an order dated December 15, 2022, the Cour administrative d'appel decided to refer the following QPC to the Conseil d'État: are the provisions of article 1737, II of the CGI contrary to the principle of proportionality of penalties set out in article 8 of the Declaration of the Rights of Man and of the Citizen?
Tax fine validated by the French Constitutional Council
The judges of the Conseil d'Etat considered that the provisions of article 1737 of the CGI were applicable to the dispute and had not already been declared to be in conformity with the Constitution by a decision of the Conseil constitutionnel. Consequently, the QPC was transmitted to the institution.
After analysis, in a decision dated June 16, 2023, the French Constitutional Council ruled that the 15-euro tax fine " is not manifestly disproportionate to the seriousness of the breaches " and therefore complies with the Constitution.
However, the penalty is not applicable in the event of a first offence committed during the current calendar year, or during the three preceding years, if it has been remedied spontaneously by the company or within one month of the first request by the tax authorities.