To counteract the impact of the economy suddenly grinding to a halt, a number of measures were introduced to allow taxpayers more time to declare or pay their taxes. The measures were necessary, but ultimately the tax due will still have to be paid.
Moreover, while most procedural deadlines have been suspended, the resumption of tax inspections will no doubt fuel many a debate on the impact of Covid-19.
Given the downward trend in corporate income tax, some groups might well have been tempted to recognise extraordinary provisions, expenses or write-downs for 2020 or even, as a precaution and when acceptable in accounting terms, for 2019. Similarly, there is no ruling out the possibility of certain downward adjustments
in valuations being retrospectively contested the tax authorities, particularly in the context of intragroup transactions or those between common shareholders, whether these relate to securities, other assets or even management packages. The same will be true for the valuations used for gifts, inheritances and real estate wealth tax (IFI) declarations.
Finally, there arises the question of increases in compulsory levies since, despite the colossal sums that have been injected into the economy and even if the government is ruling out any tax increases for the moment, the fear is that France will ultimately give way to the temptation to raise taxes.
Taxation: where do we stand?
Preparing for the post-Covid world
In response to the health crisis, which certainly qualifies as exceptional circumstances, personal data were used for a variety of purposes and on each occasion, compliance with data protection principles was a consideration to be taken into account.
CNIL, the French data protection agency, authorised French employers to create files of suspected cases of transmission of the virus so that they could implement the necessary organisational measures in- house. For many businesses, schools and universities, videoconferencing tools provided a means of continuing their activities.
Some of these tools were subject to hacking, leading to breaches of personal data. The authorities also opted to make much greater use of personal data in order to protect the health of the population. The state of health emergency law
authorised the creation of the two nationwide files designed to allow identification of those infected, those at risk of infection and the chains of transmission involved. As the implementation of the StopCovid app illustrates, however, such use of personal data to combat the spread of the virus caused much debate.
The gradual easing of lockdown now gives all concerned a chance to pursue those compliance initiatives already begun, especially since CNIL has continued to provide invaluable information and tools such as the new guidelines on data processing for HR management, use of the social security number (NIR) for social welfare purposes, and the publication of its updated register of processing activities.
Data protection more topical than ever
The lockdown had a massive impact on the activity of businesses and non-profit organisations, on the preparation of their annual accounts and the holding of their AGMs, as well on meeting contractual and administrative deadlines. The gradual easing of lockdown begun on 11 May has certainly allowed for a resumption of business and greater mobility, but the legal and financial difficulties persist.
The government has therefore extended the exceptional measures, particularly those involving an easing of the rules on distressed companies, the holding of AGMs behind closed doors , approval of annual accounts or extending deadlines falling due within the crisis period. The government has authorised the holding of AGMs and Board meetings by virtual means (via audio or video conferencing) until 31 July, even if company articles of association
make no such provision, when the meeting venue is in an area where group gatherings are banned on public health grounds.
In the case of AGMs, however, it remains impossible to consult shareholders in writing unless this is provided for in the articles of association. The initial strict list of venues covered by the ban has since grown much shorter and now applies only to those French departments in designated amber zones, where type L buildings (which includes meeting and conference rooms) can still not be opened to the public. Subject to this restriction and to following social distancing rules, however, governing bodies may resume meeting as normal.
In addition, there are also plans to grant entities closing their accounts between 30 September 2019 and 24 June 2020 a 3-month extension for: - approval of the annual accounts, if the auditor
had not issued its report prior to 12 March 2020; - financial reporting on beneficiaries of public subsidies allocated by entities.
In these unusual circumstances, our teams are geared up to provide you with all the support and information you need, via newsletters, blog articles or webinars, on the business support measures available (government- guaranteed loans, deferrals of expenses, etc.) and on temporary regulations. A webinar was held in conjunction with Lexis Nexis and the AFJE on the organisation of AGMs (available on YouTube) and a template for adapting AGM minutes developed by our teams was published in the JurisClasseur Sociétés Formulaire database.
The lockdown will at least have underscored the wisdom of making express provision in the articles of association for meetings to be held remotely.
Impact on the holding of AGMs