Collection of tax debts by the tax authorities is governed by rules that differ in many respects from the ordinary law on enforcement. When a taxpayer fails to pay an outstanding tax debt, the public accountant has a number of tools at his disposal to force payment, including seizure of the taxpayer's moveable assets. However, this coercive measure cannot be taken without a fundamental preliminary act: the summons to pay. This act, which is similar to a final notice to pay, has a number of distinctive features in tax matters, in terms of form, deadlines and the players involved. Given the complexity of these exceptional rules, the assistance of a tax debt collection lawyer is often essential to ensure that your rights are respected. Before addressing the specific tax issues, it is essential to understand the general framework of the seizure and sale of movable propertyThis stage involves the forced sale of the debtor's assets to pay off the creditor.
The basics of tax payment orders: distinctions and specific rules
Although it shares a common purpose with its civil law counterpart, the tax summons to pay has its own legal framework and procedures. It is the first stage in the legal proceedings, a formal notice warning the debtor of the imminence of seizure if he fails to pay his debt.
Definition and role of the tax payment order
In tax matters, an order to pay prior to seizure is a formal notice served by the tax authorities. The dual purpose of this act is to inform the debtor of the public accountant's intention to take legal action and to give the debtor a final period in which to comply voluntarily. In legal terms, this is an administrative notification, the effects of which are largely similar to those of a summons under ordinary law. It is essential to mention the enforcement instrument on which the proceedings are based, such as a debt collection notice or, in some cases, a notarial deed, and to give precise details of the sums claimed. Without this prerequisite, the entire seizure procedure would be null and void, a drastic legal consequence.
Legal framework and impact of the harmonisation of public finance procedures
The procedure is governed primarily by the French Tax Procedures Code (LPF). Article L. 257-0 A of the LPF states that proceedings for the recovery of direct taxes must be preceded by a formal notice to pay. This formal notice takes the place of an order to pay. Recent reforms, including certain provisions of the Finance Act, have aimed to harmonise public finance procedures. Previously, various procedures (notice to third party holder, administrative opposition) coexisted. Today, the trend is towards a unification of legal proceedings, which affects the nature and time limits of the summons. Article L. 258 A of the LPF specifies that when the seizure is initiated, notification of the formal notice to pay replaces the summons required by the Code of Civil Enforcement Procedures, marking a procedural simplification, provided for by law, to the benefit of the administration.
Specific time limits for tax payment orders: a departure from ordinary law
One of the most notable differences between the tax system and ordinary law lies in the period of time allowed to the debtor after receipt of the summons. Whereas article R. 221-1 of the Code of Civil Enforcement Procedures imposes a time limit of eight clear days before a seizure can be made, tax law provides for a longer period. Article L. 258 A of the LPF states that a seizure may only be carried out after thirty days have elapsed following notification of the formal notice. This tax feature is clearly distinct from eight-day period under ordinary law provided for the summons to pay before the seizure can proceed. This extended period is an additional guarantee for taxpayers, giving them more time to make the payment, regularise their situation or organise their defence with their lawyer. There are, however, exceptions, notably for 'first-time' debtors where, after a reminder letter for an unpaid debt has had no effect, the seizure may take place eight days after the formal notice to pay has been served.
Mandatory information specific to tax payment orders
In addition to the information common to all bailiff's documents, the tax summons must contain specific information, failing which it will be null and void. It must provide a clear and distinct breakdown of the sums claimed in principal, accrued interest (with the applicable rate) and costs. Above all, however, it must specify any penalties added to the principal debt. The omission of this financial item would prevent it from being recovered by seizure. The deed must also refer unequivocally to enforceable documents (collection notices, tax rolls), specifying their nature and date, as a simple generic reference is insufficient. Lastly, it must inform the debtor of the means and deadlines for appealing to the competent court. Failure to do so may vitiate the procedure if it deprives the taxpayer of his right to challenge the measure effectively.
Procedure for seizure and sale of movable property for tax purposes: players and detailed formalities
Tax seizures involve players with specific prerogatives and formalities that are adapted to the amount of the claim. Although this procedure is modelled on the civil law model, there are some important particularities that must be mastered for both the debtor and the public creditor.
The distinct roles of public accountants and bailiffs
Tax collection operations are not carried out exclusively by ordinary bailiffs. Article L. 258 A of the LPF provides that proceedings may be conducted "by a bailiff or by any agent of the administration authorised to take legal action on behalf of the accountant". Since the recent reforms, the term "commissaire de justice" has come to be used. These agents, often referred to as "huissiers du Trésor", are civil servants in the public finance administration who have prerogatives similar to those of ministerial officers for the enforcement of tax titles. They can seize the taxpayer's personal property. The public accountant is the authorising officer for the procedure. It is the accountant who issues the writ of execution, which forms the basis for the entire enforcement action. He has extensive powers of investigation to obtain information about the debtor's assets from various bodies, without being bound by professional secrecy.
The system of subsidiarity and the formalism of small tax claims
For claims with a principal amount of €535 or less (excluding maintenance claims), the law introduces a principle of subsidiarity. Seizure of residential premises may only be carried out if recovery by other means proves impossible. This obligation to seek an alternative, such as seizing a bank account or garnishing wages, is an essential condition. Although the €535 threshold is the same, the subsidiarity regime for small claims The tax system differs significantly from the civil system, particularly with regard to the addressee of the injunction. The summons to pay must contain an order to the debtor to provide the name and address of his employer and the details of his bank and post office accounts, not to the bailiff but directly to the public accountant pursuing the claim. This distinction is crucial, and should not be confused with a conventional payment order, as it is part of an enforcement stage that is already based on a title. If the debtor fails to respond, the accountant can use his powers to obtain this information. In a notable ruling, the Court of Cassation stated that the Treasury accountant can legitimise a seizure for a small debt simply by justifying that it was impossible, through his internal research, to carry out a seizure on an account or wages, thereby dispensing with the need to seek authorisation from the enforcement judge.
Seizure and sale of movable property for tax purposes by a third party: specific features and guarantees
The seizure may involve property belonging to the debtor but held by a third party. However, entering a third party's residential premises requires enhanced guarantees. Article L. 221-1 of the Code of Civil Enforcement Procedures requires the pursuing agent to obtain prior authorisation from the enforcement judge of the judicial court. This authorisation is requested by application and is required whether the premises are the principal or secondary residence of the third party. Once on the premises, the bailiff or authorised agent must ask the third party to declare the assets held on behalf of the debtor. Refusal to declare or making a false declaration exposes the third party to severe penalties: he or she may be ordered to pay the tax debt, unless he or she subsequently takes recourse against the debtor to obtain reimbursement. The third party is also the custodian of the seized assets and may not dispose of them, even to return them to their owner, on pain of criminal penalties.
Specific tax disputes and appeals
The tax procedure, like certain surprise seizure procedures is designed to be effective, but it is nonetheless strictly regulated and open to challenge. Taxpayers who have been served with an order to pay or who have had their assets seized have specific legal remedies, the keystone of which is the link between the administrative and judicial courts.
The fundamental distinction between tax assessment and collection disputes
All tax disputes are based on a cardinal distinction: that between tax assessment disputes and collection disputes. The first, the assessment dispute, concerns the validity of the tax itself (its existence, amount and due date). These disputes fall exclusively within the jurisdiction of the tax judge, i.e. the administrative court. The second concerns the legality of the proceedings. If a taxpayer considers that the summons to pay is irregular in form (absence of an obligatory mention, procedural error), he must refer the matter to the enforcement judge (JEX) to the competent court, which is the natural judge for enforcement disputes. This division of jurisdiction is a matter of public policy: the JEX cannot rule on the amount of the tax, and the administrative court cannot rule on the validity of an attachment order.
Appeal procedures and deadlines: the essential preliminary administrative appeal
Another major specificity of tax collection litigation is the requirement for a prior administrative appeal. Before a taxpayer can appeal to the enforcement judge to contest the formal legality of a debt collection action, he or she must submit a complaint to the tax authorities. This request, known as an objection to prosecution, must be made to the departmental director of public finance within two months of notification of the disputed act, as stipulated in article R.* 281-1 of the Book of Tax Procedures. Only after this claim has been rejected (explicitly or implicitly after the administration has remained silent for two months) can the taxpayer refer the matter to the JEX. Failure to comply with this precondition renders any legal action inadmissible.
The problem of the statute of limitations on enforceable tax titles and the jurisdiction of the jex
The tax authorities' recovery action is not eternal. Article L. 274 of the LPF introduces a four-year forfeiture period: the public accountant has four years from the date on which the tax assessment is issued to recover the tax. Once this period has elapsed, a writ of execution is time-barred and no further legal action can be validly taken. The question of prescription is all the more complex as the limitation period for enforcement of a title The general rules applicable to court decisions do not apply to tax enforcement orders. When examining the dispute, the Enforcement Judge is competent to establish that the tax deed submitted to him is time-barred in the event of a dispute over the validity of a debt collection action. If he finds that the action for recovery is time-barred, he must cancel the summons to pay and the subsequent acts, as they are then devoid of any legal basis.
Issues and practical recommendations regarding the seizure and sale of movable property for tax purposes
The specific features of tax seizure proceedings call for particular vigilance on the part of both the debtor and the public creditor. Cost control and knowledge of defence strategies are essential for navigating this technical litigation. To analyse the legality of a tax payment order or challenge a seizure, our law firm puts its expertise at your service.
Controlling costs: the treatment of costs in tax proceedings
In principle, as in common law procedures, the costs of enforcement are borne by the debtor, an obligation set out in article L. 111-8 of the Code of Civil Enforcement Procedures. This includes the bailiff's fees and the costs of actions by government officials. However, this same article specifies an important exception: costs are not payable by the debtor "if it is clear that they were not necessary at the time they were incurred". A taxpayer could therefore challenge the payment of costs relating to the seizure of a small debt if the administration has not demonstrated that it has tried less costly measures beforehand, such as the administrative seizure by a third party (new name for the third party notification), thereby violating the principle of subsidiarity. The enforcement judge has jurisdiction to contest these costs.
Sound advice for tax debtors and creditors
For the debtor, receiving a tax summons to pay should trigger an immediate reaction. It is essential to carefully examine the formal legality of the document: are all the compulsory details present? Is the statement of account correct and detailed? Is the four-year limitation period respected? The next step is to analyse the substance of the claim. If the amount of tax is questionable, you should take proceedings before the administrative court without delay and try to obtain a deferment of payment. At the same time, it is crucial to comply with the formalities of the preliminary administrative appeal for any challenge to the debt collection proceedings. Failure to act, or to act in an uncoordinated manner, may result in the seizure being completed. The public creditor must also be rigorous. Any failure to comply with the rules of form or procedure may result in the cancellation of the proceedings and incur the liability of the administration. Particular attention must be paid to compliance with the principle of subsidiarity for small claims in order to avoid unnecessary disputes over the assumption of costs.
The procedure for recovering tax debts is a complex area where special rules prevail. Each stage, from the payment order to the dispute, requires precise legal expertise if you are to assert your rights effectively. For an in-depth analysis of your situation and tailored advice, contact our team of tax lawyers in Paris.
Sources
- Livre des procédures fiscales (LPF), in particular articles L. 257-0 A, L. 258 A, L. 274, L. 281, R.* 281-1
- Code of Civil Enforcement Procedures (CPCE), in particular articles L. 111-8, L. 221-1, L. 221-2, R. 221-1, R. 221-2
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