Among the many business impacts brought on by the COVID-19 pandemic and resulting economic unrest are a slew of legislative changes and recommendations. Here are some important updates to know about if you have employees, and thus payroll, in France.
Extensions for compliance filings
The filing deadlines applicable to 2019 income tax returns have been extended until June 4.
Extensions for payment deadlines
Several payment due dates have been deferred or postponed, including:
- Social and fiscal installments, like URSSAF and direct taxes
- Rent, water, gas and electricity bills for the smallest companies in difficulty
- Tax payments to the Business Tax Office (EIS) of the General Directorate of Public Finances
If you’ve already made payments for March, you may be able to oppose the SEPA direct debit through your bank. You can also request a refund from your business tax office once the debit has been made.
There will be no deferral of payment for VAT or withholding tax due on wages paid to employees.
Special considerations or recommendations—as an employer or for employees—to keep in mind
For employers with more than 50 employees whose URSSAF due date is April 5, it’s possible to defer all or part of employee and employer contributions for up to three months with no penalty. These employers can adjust payments according to their needs.
In addition, employers in France are not allowed to force employees to take leave nor can they freeze current recruitments. And all CFAs, including those in overseas territories, have been instructed not to take on apprentices.
Programs or initiatives to help offset financial impacts
Partial activity status
It’s possible for companies to apply for partial activity within 30 days with retroactive effect. Review of requests generally take place within 48 hours, but could take three to 10 days due to a high volume of requests.
Shops and business establishments who have reduced their activity or are obligated to close can benefit from partial activity status, as some payroll costs may be reimbursed in full, up to a limit of 4.5 times the minimum wage.
Solidarity fund
The tax administration will open the solidarity fund to companies, regardless of their status, that meet the following criteria:
- Have fewer than 10 independent employees
- Have a 2019 turnover less than 1 million euros
- Have been closed by administrative decision
- Have suffered a more than 70% loss in turnover between February 21 and March 31 compared to the previous year
State-guaranteed cash loans
The government is implementing an exceptional guaranteed loan scheme―up to 300 billion euros―to support the financing of companies. This scheme will cover all new treasury loans granted from March 16 to December 31. In addition, French banks have deferred the repayment of business loans up to six months free of charge.
Credit meditation
Any company that encounters difficulties with one or more financial institutions, including banks, lessors, factoring companies and credit insurers, can reach out for credit mediation through the Credit Mediation Scheme.
Business loans
Companies can apply for a loan equivalent to up to three months turnover. Depending on cash flow requirements, the loan could be for one, two or three months’ turnover, with no obligation to repay before one year. At the end of the 12 months, repayment will be made by immediate reimbursement or by progressive repayment, extending the loan for up to five more years.
The guarantee of the loan is paid to the State (BPI). Companies with a turnover less than 50 million euros, will pay 0.25% of the loan amount. Companies with a turnover greater than 50 million euros, will pay 0.50% of the loan amount. If the loan extends beyond one year, this rate will increase progressively.
Although this information is correct and up-to-date as of the 8th of April 2020, changes are happening frequently. Please seek professional advice as you work through payroll and HR challenges in France.
This post first appeared on Safeguard Global’s website here. Safeguard Global are an exhibitor on the HRTech247 Payroll floor. You can visit their HRTech247 exhibition stand here.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Please note that HRTech247 and Safeguard Global expressly disclaim any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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