Everything you need to know about the tax return: definition, composition, usefulness and new features!
What are tax returns and what is their purpose? Do you have to prepare one? What does it consist of?
When you're a business owner, it's quite normal to have all these questions about tax returns and your responsibilities.
Don't panic, this article covers the essential points to help you master the concept of tax returns at your fingertips... in just a few minutes!
What is a tax return? Definition
The tax package is a set of documents drawn up by a company or its chartered accountant at the end of each financial year, in order to declare the income it has generated to the tax authorities.
It includes the annual accounts, such as the balance sheet and profit and loss account, and is compulsory for (almost) all companies.
- 🤔 What about the tax return for micro-businesses? They are not required to do so.
- 🤔 And what about tax returns for associations? The majority of them are not required to keep accounts, although there are a few exceptions.
What is the purpose of the tax return?
It is used to communicate the company's financial position, in a regulated manner, and must be sent to the tax authorities:
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to calculate the amount of tax due,
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and to check compliance with regulations.
👉 Its reliability also makes it a much-appreciated document, consulted by investors, banks, suppliers and customers, to justify good financial health. It is a reassuring factor for current and future financial partners!
Composition of the tax return
The tax return is made up of a CERFA form for declaring income, and 18 appendices listed below:
| 2050 | balance sheet assets |
| 2051 | balance sheet liabilities |
| 2052 | profit and loss account |
| 2053 | income statement (continued) |
| 2054 | fixed assets |
| 2055 | depreciation |
| 2056 | balance sheet provisions |
| 2057 | maturity of receivables and payables at year-end |
| 2058 A | determination of taxable profit |
| 2058 B | deficits, holiday pay and non-deductible non-deductible provisions |
| 2058 C | income appropriation table and miscellaneous information |
| 2059 A | determination of capital gains or losses |
| 2059 B | allocation of short-term capital gains, gains on merger or transfer |
| 2059 C | monitoring long-term capital losses |
| 2059 D | long-term capital gains and provisions for price fluctuations |
| 2059 E | value added produced during the financial year |
| 2059 F | composition of share capital |
| 2059 G | subsidiaries and participating interests |
Tax returns: what's new in 2021
As a reminder, a number of new features were introduced to the tax return in 2020:
- the elimination of forms for the competitiveness and employment tax credit (CICE),
- the pre-filling of amounts subject to income tax thanks to the integration of new headings,
- the tax reduction for sponsorship is now completed in a special appendix,
- self-employed workers must now report their social security information on the BIC/IS form (as the Déclaration sociale des indépendants will disappear in 2021).
As for 2021, the new features concern :
- the sending of the tax return for 2021, as explained below,
- the 2021 version of the tax return, to be sent from 1 April 2021 (at 0:00),
- legislative and regulatory changes,
- the pre-filling of the income tax return for individuals and partners of non-trading companies.
💡 The changes do not affect the calculation or composition of the tax return.
▶︎ When should the 2021 tax return be filed?
The deadline for filing the tax return in 2021 is scheduled for 4 May 2021 and concerns :
- companies subject to corporation tax (impôt sur les sociétés) with a financial year ending on 31 December 2020;
- companies subject to income tax (impôt sur le revenu).
☝️ Good to know: a period of 15 days has been granted in the context of remote procedures, i.e. until 19 May 2021 at the latest. For companies closing their accounts on another date, the filing must take place on the last day of the 3rd month following the closing date.
How do you fill in your tax return?
For a detailed explanation of the procedure, see our full article on how to complete your tax return.
To summarise, there are 2 ways of doing this:
- either on the impots.gouv.fr website via your member area,
- or by EDI (electronic data interchange) remote filing via a partner or your accounting software.
Article translated from French