The french commercial law states that all the companies paying corporate income taxe in France should keep books in order to support the corporate income tax computation. The books should be maintained in french GAAP.

In 2014 the french regulator added a new obligation : The FEC file. The FEC file is an electronic version of the mandatory statutory accounting journals including all the journal entries within a a specific format defined by the law. The FEC file should of course be reconcilied with the accounting trial balance and the annual tax return of the company.

The FEC file should be provided to the tax authorities in case of tax audit and allow them more efficiency during the audits.

Failure to provide the FEC file or provide a non-compliant FEC file will entail the application of a fine amounting 10% of the reassessed taxes during the audit with a minimum of € 5,000 per fiscal year.

Most of the french accounting softwares are FEC compliant but some internartional ERP or forgein accounting systems are not.

The FEC file has then become a french tax compliance challenge for french subsdiaries/branches of foreign groups.

Hexagone Advisory is in capacity of testing your FEC file to check compliance and assist you preparing a compliant FEC file.