What is the relevant legislation relating to tax administration and controversies? Other than legislation, are there other binding rules for taxpayers and the tax authority?
The legislation applicable to tax administration and controversies is tax law that is codified in the French Tax Code (FTC) and the French Tax Procedure Code (FTPC).
The FTC contains legislation on the basis of, and the collection of: income tax; corporation tax; value added tax (VAT); registration fees; local taxes; and other direct and indirect taxes collected by the state and local authorities. The FTPC contains the rules that govern the litigations concerning the calculation and the collection of tax.
There are two types of French tax laws: the French Finance Law, promulgated at the end of the year; and the French Amending Finance Law, which allows changes to the original text during the year.
The legislative process begins with the preparation of a draft law at the initiative of the government. This bill is then passed by the two-chamber French parliament: the National Assembly and the Senate.
French tax law is at the bottom of the hierarchy of norms. It must therefore comply first of all with the conventionality block, which means that it must comply with the norms of international law (international treaties and agreements, including the European Convention on Human Rights) and European Union standards (treaties and derivatives, Community regulations and directives).
It must then comply with the constitutionality block, which is the set of principles and provisions that French laws must respect, and of which the Constitutional Council is the guardian. It mainly includes:
- the articles of the 1958 French Constitution;
- French Declaration of the Rights of Man and of the Citizen;
- Preamble of the 1946 French Constitution;
- French Environmental Charter; and
- principles laid down by either the Constitutional Council or the State Council.
The law is then interpreted and clarified by the French government and the French Tax Administration (FTA) under the control of the courts.
The French tax doctrine is to be found on a dematerialised database called the Bulletin Officiel des Finances Publiques (BOFIP); the doctrine is enforceable by the taxpayer against the FTA, when it is more beneficial to the taxpayer.
Finally, taxpayers may ask the FTA to provide them with an interpretation of the tax texts in the light of their particular situation. This answer, called a ruling, is enforceable by the taxpayer against the FTA.Relevant authority
What is the relevant tax authority and how is it organised?
The French Tax Administration (FTA) is a generic name for all government agencies whose role is to establish the basis for direct and indirect taxes, allowing, afterwards, the Public Accountant to collect them.
The FTA depends on the Ministry of the Economy and Finance. It is composed of the General Directorate of Public Finance (DGFiP) and the General Directorate of Customs and Indirect Taxes (DGDDI). However, the Unions de Recouvrement des cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), in charge of collecting social security contributions, is not a part of the FTA.
The DGFiP manages the taxation of natural persons and companies, defines the tax guidelines and draws up with the Minister the procedures for the control and payment of public expenditure. The DGFiP is also the competent authority to receive requests for rulings.
The DGFiP has central services that design and develop tax laws and regulations, and decentralised services that establish the basis of the taxes from individuals and companies. After the basis is established, another service called the recovery service is in charge of collecting the different taxes.
The decentralised services operate at the local and regional level under the Regional Public Finance Directorates (DRFiP) and the Departmental Public Finance Directorates (DDFiP).
EnforcementCompliance with tax laws
How does the tax authority verify compliance with the tax laws and ensure timely payment of taxes? What is the typical procedure for the tax authority to review a tax return and how long does the review last?
In France, the tax system is declarative and repressive. To exercise its power of control, the FTA has investigative powers and powers to obtain information through the procedures of requests for clarification or justification, right of communication, and various special measures.
The control operations themselves take various forms: either a simple critical examination of the declarations subscribed, by the control agent, using the information and documents on file (documentary control), or a spot-check carried out at the taxpayer’s request, or a thorough control. For companies, this control is carried out in the form of an accounting audit, while for natural persons it is in the form of a contradictory examination of their personal tax situation.
Some guarantees are given to taxpayers. Indeed, the accounting audit procedure may not be renewed for a specified period of time in respect of a tax or group of taxes, and may not exceed three months for taxpayers not exceeding a certain turnover. In addition, for natural persons, the procedure is limited to one year and may be extended to two years.Types of taxpayer
Are different types of taxpayers subject to different reporting requirements? Can they be subjected to different types of review?
In France, the reporting requirements depend on the types of taxpayers. Three types can be distinguished: business entities, individuals and trusts.
Individuals are required to file an income tax return each year during the month of May to declare their taxable income for the past calendar year. The reporting requirement should be carried out online unless the taxpayer can justify that he or she cannot have access to it online. Non-residents must also file a French income tax return for all their French income. Finally, certain non-residents are compelled to report information regarding the latent capital gain that they could be indebted to in accordance with the exit tax system.
Business entities are also submitted to certain obligations, they are subject to more taxes and, in consequence, they have more obligations to declare than only their yearly income. These obligations are more or less important according to an entity’s size and turnover (eg, VAT or transfer pricing obligations).
For trusts, two reporting obligations are required:
- they must report annually:
- if one of the settlors, beneficiaries or directors is a French tax resident: property and rights located in France or outside France and capitalised income placed in the trust; or
- if none of the parties to the trust is a French tax resident but property or rights placed in trust are located in France: only property and rights located in France and income capitalised in the trust; and
- the information declared must be recorded in a register, which shall be made available to the public.
In addition, they must declare any event affecting the trust within the following month, the event being its formation, modification or termination.
Concerning the different reviews the three types of taxpayers can be subjected to, French tax law distinguishes piece control (carried out from the office) and external control:
- Piece control: the tax officers are offered different procedures:
- Piece control and information requests: this procedure concerns all taxpayers, all taxes and all tax returns for non-prescribed years. In this procedure, the FTA is not obliged to inform the taxpayer that a piece control is in progress. In addition, tax officers are always able to ask for information informally. The information requests are non-binding, but the default of answer can lead to the taxpayer being in an uncomfortable situation.
- The right of communication: this allows the FTA to obtain certain documents (accounting books and records) or information from taxpayers having the quality of a merchant, the banks, regulated professions, courts and social organisations. Refusal to communicate can lead to a €5,000 fine per document, without exceeding €50,000. The FTA is required to inform the taxpayer of the content of any documents obtained by third parties and on which the tax adjustment is based. Since 2017, the FTA is also authorised to interview all persons susceptible to communicate information in the matter of international fraud.
- Clarification and justification request: this is a very restrictive procedure for the taxpayer as it can lead to automatic taxation. The procedure can be used in combination with all other procedures. The FTA asks the taxpayer for explanation of all obscure points in the tax returns. Justification can only be asked regarding precise subjects such as foreign accounts or property income.
- External control: one procedure concerns natural persons, and another concerns companies:
- The accounting audit procedure: this concerns only taxpayers required to keep an accounting record. The taxpayer must be informed before this procedure is engaged so a counsel can be chosen. The FTA must inform the taxpayer for which fiscal year the control will be conducted. The FTA is also required to offer an oral and contradictory debate before a synthesis meeting in order to understand the operating condition of the company. Afterwards, the FTA propose adjustments to the taxpayer.
- The contradictory examination of the personal tax situation of a natural person: this concerns, as its name implies, only natural persons. The aim is to control the coherence between the declared income and the inheritance situation of the taxpayer, according to his or her way of life, for example. This procedure must be preceded by a verification notice stating that the taxpayer can be assisted by a counsel of their choice. The procedure cannot last longer than one year from the receipt of the verification notice. If the FTA discovers a concealed activity or when the procedure of communication is used, the duration of this procedure can be extended to two years. As it is a contradictory procedure, the FTA must engage in a debate with the taxpayer on the proposed corrections. This debate can be oral or written; in any case, it is mandatory and its absence is a substantial irregularity. The procedure ends with an audit report.
What types of information may the tax authority request from taxpayers? Can the tax authority interview the taxpayer or the taxpayer’s employees? If so, are there any restrictions?
For natural persons, in the context of a request for information or a tax audit, the FTA may ask the taxpayer for any document proving or supporting the elements declared. The FTA may thus request access to all account statements and financial documents of the taxpayer and must return all documents before proceeding with a request for justification.
For companies, the documents requested are the entire accounting documents; for example, balance sheet, income statement, invoices and statements of account. In addition, where applicable, the company may be required to provide its transfer pricing documentation and all its consolidated accounts.
The FTA may, within the framework of its investigative powers, request certain information from third parties such as employers, customers and suppliers, as well as the tax authorities of other countries. However, the latter are not legally required to respond and may in any case refuse to provide such information.Available agency action
What actions may the agencies take if the taxpayer does not provide the required information?
In the absence of a reply or in the event of insufficient replies, the FTA may proceed to the automatic taxation procedure (eg, the FTA refers to the elements in its possession to reconstitute the tax bases) directly or after having issued a formal notice. Furthermore, there will also be automatic taxation if the control cannot take place because of the uncooperative behaviour of the taxpayer or other persons (individual or collective opposition). This automatic imposition will be accompanied by interest for late payment with a 100 per cent surcharge.
In addition to tax sanctions, opposition to the tax audit may also be sanctioned by criminal sanctions, namely, a fine of €25,000 and, in the event of a repeat offence, a potential affirmative or suspended prison sentence of six months.Protecting commercial information
How may taxpayers protect commercial information, including business secrets or professional advice, from disclosure? Is the tax authority subject to any restrictions concerning what it can do with the information disclosed?
Professional secrecy cannot be invoked by the taxpayer to refuse to provide certain information. Nevertheless, the principle of confidentiality between lawyer and client is enforceable against the FTA.
Certain guarantees are provided for the taxpayer. Indeed, the FTA is bound by confidentiality under penalty that the defaulting agent may be sanctioned criminally. However, in the context of international administrative assistance, the FTA may have to transmit certain information to foreign administrative entities.
In addition, by a law dated 23 October 2018 on the fight against fraud, administrative officers are released from professional secrecy with regard to the public prosecutor regardless of the existence of a complaint, transmission or legal proceedings in progress.Limitation period for reviews
What limitation period applies to the review of tax returns?
The right to remedy omissions, deficiencies or errors in the establishment of the tax may only be exercised by the FTA during a specific period, known as the collection or limitation period, at the end of which no further or additional taxation can be established.
While this period is generally three years, specific periods are provided for in terms of local direct taxes, registration fees and real estate wealth tax.
The collection period can be extended to the end of the sixth year in the event of the absence of a declaration or document submitted to any registration formalities, or in the event of the need for further investigations, and to the end of the tenth year in case of concealed activity or fraud in certain specific cases.Alternative dispute resolution
Describe any alternative dispute resolution (ADR) or settlement options available?
The French tax procedure is characterised by a very important pre-litigation phase. This phase, based on a dialogue with the FTA, can take several months or even years before the courts are involved.
Following the control procedure, the FTA must send a proposal for rectification to the taxpayer by registered mail within a maximum period of three years. To be valid, this proposal must include certain mandatory information (right of assistance, deadline for reply, financial consequences and reasons).
Following this proposal for rectification, the taxpayer has 30 days to make his or her comments. This period may be extended to 60 days. If the FTA maintains its adjustment, the taxpayer has two possible remedies. These routes can be exercised simultaneously.
On the one hand, the taxpayer can refer the matter to the departmental committee on direct taxes and turnover taxes, whose competence is limited to disputes concerning: income tax, corporation tax and VAT. The opinion formulated by the committee is not binding either on the taxpayer or on the FTA.
On the other hand, the taxpayer may refer the matter to the controller’s hierarchical superior.
Only if no solution has been found can the taxpayer file a contentious claim. Following this complaint, he or she may bring an action before the competent courts.
During the course of this procedure, the FTA cannot request any payment.Collecting overdue payments
How may the tax authority collect overdue tax payments following a tax review?
The FTA has a period of four years from the date of the assessment of the tax notice or the sending of the assessment notice to obtain payment of the Treasury’s claim. The limitation period is extended to six years for taxpayers established in a foreign country outside the EU. If the taxpayer requests a delay of payment, the limitation period is suspended. This period is interrupted in the case of formal notice, precautionary measures or legal proceedings.
In the event of default and after formal notice, the FTA may take protective or enforceable measures. It has a specific procedure, the notice to third party holders, in addition to the other common law procedures (seizure of real estate, bank accounts, securities, etc). This procedure has the advantage of being less restrictive in its implementation than other ordinary legal procedures, especially because the Treasury establishes its own enforceable titles without seizing the judge.Penalties
In what circumstances may the tax authority impose penalties?
There are many reasons for the tax authority to impose penalties on the taxpayer, such as:
- inaccurate or incomplete tax return filed;
- late filing of tax return;
- no filing of tax return;
- late payment of taxes; and
- non-payment of taxes.
Usually, late payment interest is also due.
How are penalties calculated?
Penalties are calculated depending on the event that arose:
Type of penalty
Inaccurate or incomplete returns
They are assessed on the adjusted tax at different rates:
Late filing of tax return
They are assessed on the adjusted tax at different rates:
Failure to pay taxes
Penalties are assessed on the basis of 5 per cent or 10 per cent, depending on the taxes involved.
What defences are available if penalties are imposed?
The FTA has to give justification regarding the penalties imposed, relying on the correct legal provisions to characterise the error made by the taxpayer. If the penalties are not justified, taxpayers can ask for them to be forfeited. Sometimes, reductions of penalties are granted automatically or on a discretionary basis.Collecting interest
In what circumstances may the tax authority collect interest and how is it calculated?
There is a collection of late-payment interest when the payment of taxes was improperly deferred, or tax returns were not filed on time, or improperly. The late-payment interest may be reduced subject to certain conditions.
Interest on arrears may be reduced or not be due, subject to certain conditions; for example, where a taxpayer has made an explicit declaration in his or her tax return or where legal tolerance may be applied if the amount of the revalued tax does not exceed: (i) 1/20 for income tax; or (ii) 1/10 for transfer taxes and property tax of the taxable income.
Interest for late payment is calculated at the rate of 0.2 per cent on the amount of the reassessed tax and generally begins to accrue from the 1st of the month following the month in which the tax in question should have been paid, ending on the last day of the month following notification of the reassessment.Criminal consequences
Are there criminal consequences that can arise as a result of a tax review? Are these different for different types of taxpayers?
If a taxpayer acts as an opponent to the tax audit, then he or she could be criminally sanctioned and subject to a fine, and in the case of a repeated offence can be subject to a jail sentence decided by a criminal court.
If the taxpayer committed tax fraud, then he or she could also be held criminally responsible for such acts if they acted intentionally and fraudulently (bad faith) in order to avoid tax liability. Such prosecution is started on the initiative of the FTA, with the consent of a tax commission on criminal tax matters.
Since the Law of the 23rd October of 2018 on the fight against fraud, the FTA is required to transfer the matter to the prosecution when the amount is greater than €100,000.Enforcement record
What is the recent enforcement record of the authorities?
According to the FTA’s enforcement survey with respect to 2018, reassessed taxes and associated penalties were estimated at €16.1 billion. Tax audits resulted in the collection of €8.7 billion (compared with €9.4 billion in 2017). Approximately 2.8 million contentious claims were filed in 2018 and an equivalent number of claims were dealt with in 2017. The number of court proceedings filed in 2018 (about 22,000) was lower than the number of court proceedings filed in 2017 (about 23,000). Approximately 800 criminal claims for tax fraud were filed by the FTA in 2018.
Third parties and other authoritiesCooperation with other authorities
Can a tax authority involve or investigate third parties as part of the authority’s review of a taxpayer’s returns?
The FTA is allowed to request information on the taxpayer from third parties (ie, banks). If the third party is permitted by the FTPC to answer such questions, then it must answer to the FTA request. If it does not do so, it could get a fine for failure. Some financial institutions have to disclose information on their client on their own initiative.
The FTA only has the obligation to inform the audited taxpayer that it obtained information from third parties if the FTA is willing to send a tax reassessment.
Does the tax authority cooperate with other authorities within the country? Does the tax authority cooperate with the tax authorities in other countries?
The FTA works with other French authorities and with foreign tax and non-tax authorities. Such cooperation may be either on request or automatic.
Concerning cooperation with foreign authorities, the FTA can rely on the provisions of double tax treaties, and on those of Council Directive 2011/16/EU (as amended) and the Protocol to the OECD Convention. These provisions allow the FTA to request information in order to control the tax base of natural and legal persons resident in France and to request assistance in tax collection.
France has signed an intergovernmental agreement with the United States concerning the Foreign Account Tax Compliance Act (FATCA), under which French financial institutions are required to provide information on the accounts of their US customers to the French government, which in turn will exchange this information with the US tax authorities. A reciprocity clause requires the US tax authorities to provide certain information on French residents holding US accounts. France has also introduced common reporting standards, meaning that financial institutions are required to perform certain due diligence to identify account holders, collect information (including tax residence and identification numbers) and provide certain information about account holders and accounts to the FTA.
Special proceduresVoluntary disclosure and amnesties
Do any special procedures apply in cases of financial or other hardship, for example when a taxpayer is bankrupt?
In the event of financial hardship, taxpayers are allowed to ask for either payment deferral or a write-off of all or part of the taxes. There is not any special collection in such cases. French tax administration may use a preferential right owned over all movable assets of the taxpayer and may obtain a mortgage over their immovable property. The FTA can also recover amounts due from third parties.
Are there any voluntary disclosure or amnesty programmes?
Taxpayers have the opportunity to regularise all mistakes that are unintentional or inaccurate in their tax returns. By acting in good faith, they will be granted a lower rate of late-payment interest. However, even if no amnesty programme exists in France, taxpayers may ask the FTA for leniency by introducing a claim for equitable relief.
Rights of taxpayersRules protecting taxpayers
What rules are in place to protect taxpayers?
The FTA must provide the taxpayer with a tax-audit notice when they start the audit, stating that the taxpayer can be legally represented and explaining the reasons and extent of such audit. If the tax authority fails to provide the right mandatory information, then the procedure may be void.
Usually, a taxpayer bill of rights used to be provided to the taxpayer before an audit. However, at present the letter simply mentions the website on which the bill of rights is located.
The outcome of the audit must be sent to the taxpayer with the reasoning used and adjustments and penalties applied. Then the taxpayer can ask for a report.
Another audit cannot be made for the same tax period and taxes once one has already been made.Requesting information
How can taxpayers obtain information from the tax authority? What information can taxpayers request?
If the FTA asks third parties to provide information, documents or both related to the taxpayer in order to justify a reassessment, then the FTA has to inform the taxpayer of such process and transmit all related documents.
When the FTA has undertaken a raid, it must provide the taxpayer with an inventory of documents seized by the agents.Tax authority governance
Is the tax authority subject to non-judicial oversight?
Taxpayers have the opportunity to request a review of their case to be carried out by the appropriate commission, generally composed of practitioners, judges or tax experts.
Moreover, before starting prosecution for tax fraud, the FTA must have the approval of the commission focusing on tax crime.
Taxpayers can also ask for a departmental tax conciliator or ombudsman to find a solution to the conflict arising with the FTA.
Court actions (describe trial court actions in this section)Competent courts
Which courts have jurisdiction to hear tax disputes?
Tax proceedings depend on either administrative or civil courts, depending on the type of tax involved:
Field of competence
Indirect taxes other than VAT
Other direct taxes
Real estate wealth tax
Some questions may be raised with the Constitutional Council to determine whether a specific provision is compliant with the French Constitution.
Courts can also seek preliminary rulings from the Court of Justice of the European Union (CJEU) regarding the interpretation of the EU treaties or the validity and interpretation of acts of the EU institutions or other EU bodies.Lodging a claim
How can tax disputes be brought before the courts?
Every taxpayer is entitled to bring a dispute before the courts, as long as he or she has already filed a prior claim before the FTA, and usually has up to three years (31 December of the second year following that of the tax collection) to bring a claim. The FTA has no obligation to answer within a specific time frame; however, if it does not answer within six months, the claim is considered rejected.
In the case of a refusal, the taxpayer has two months to oppose the decision of the FTA before a court, starting with the date of receipt of the refusal letter.
In France, there is no minimum threshold amount for claims.Combination of claims
Can tax claims affecting multiple tax returns or taxpayers be brought together?
Tax claims can be brought together as long as they are similar in nature. The judge has to inform the parties of such decision, which they may refuse. However, such a claim may be requested by the taxpayer so that its claim can be consolidated with other similar cases.
Contentious claims on several taxes may be split through different contentious claim refusals if the proceedings are not the same. In such event, each refusal will be treated separately.Pre-claim payments
Must the taxpayer pay the amounts in dispute into court before bringing a claim?
Once a notice of assessment is received, the taxpayer has to pay the taxes. He or she can then bring a contentious claim. The taxpayer can get a tax deferral as long as he or she presents financial guarantees to the FTA, or it will implement protective measures. The end of the deferral arises when the decision of the lower court is rendered or when the period of claim is over.
If the decision is in favour of the FTA, the taxpayer will have to pay taxes immediately, with the relevant penalty and interest.
If the decision goes against the FTA, the taxpayer will be eligible to default interest on taxes already paid, and is then reimbursed for the fees related to the provision of guarantees.Cost recovery
To what extent can the costs of a dispute be recovered?
If the taxpayer wins the case, some costs are reimbursed automatically (eg, registration fees and expertise costs).
Usually, the losing party bears all other costs, up to an amount defined in the judge’s decision.Third-party funding
Are there any restrictions on or rules relating to third-party funding or insurance for the costs of a tax dispute, including bringing a tax claim to court?
According to the National Internal Regulations, a lawyer may only charge fees to a client or one of his or her representatives. A third party may guarantee a taxpayer (whether individual or company) in the event of a request for deferment of payment.
In some cases, and in some circumstances, third parties may purchase potential overpayments by taxpayers to the FTA and offer to assist in filing a refund application and assume the related costs, in exchange for a portion of the gain obtained.Court decision maker
Who is the decision maker in the court? Is a jury trial available to hear tax disputes?
The number of judges depends on the jurisdiction. Each level has its own number, depending on the importance of the case.
- lower civil court (TGI): 3;
- civil court of appeal (CA): 3; and
- Supreme Court (Cour de Cassation): 3-19.
- lower administrative court (TA): 1-3;
- administrative court of appeal (CAA): 3-5; and
- Supreme Court (Conseil d’Etat): 3-19.
There is no jury for tax matters.Time frames
What are the usual time frames for tax trials?
The time frame depends on the specificities of the case and the level of jurisdiction. Trials before lower courts and courts of appeal take about one to two and a half years, and trials before the Supreme Court take about one to two years.Disclosure requirements
What are the requirements concerning disclosure or a duty to present information for trial?
Contrary to UK proceedings, there is no discovery process in France. All documents from taxpayers transmitted to the court are sent to the FTA. However, documents received from the FTA are not always sent to taxpayers.
The court rules its decision on the basis of elements that parties had the opportunity to discuss.Permitted evidence
What evidence is permitted in a tax trial?
Tax trials are based only on a written procedure. The judge then examines all facts and legal arguments developed by each party in order to understand the case and its consequences. The only oral part happens at the trial, where parties can make oral observations during the hearing.
Experts can be appointed by judges to clarify a point of the case.Permitted representation
Who can represent taxpayers in a tax trial? Who represents the tax authority?
In tax cases, legal representation is generally mandatory. However, in lower civil and administrative courts, representation is not required.
The FTA represents itself most of the time, except before the Supreme Court.
Legal aid can be awarded to taxpayers who cannot afford legal representation.Publicity of proceedings
Are tax trial proceedings public?
Tax trial proceedings are public in France.Burden of proof
Who has the burden of proof in a tax trial?
The burden of proof lies on the FTA. However, this can be reversed and then the taxpayer has to prove he or she is not guilty. This arises in situations such as when the FTA has unilaterally adjusted the taxes of the taxpayer, or when the taxpayer did not reply to a reassessment notice.Case management process
Describe the case management process for a tax trial.
During the trial, the court organises the exchange of briefs. Each party has a specific deadline to send its brief or send their answer to the other party. When exchanges are over, the court issues an order for the conclusion of proceedings. Once the order has been issued, no more briefs will be examined by the court.Appeal
Can a court decision be appealed? If so, on what basis?
If the taxpayer (or the FTA) disagrees with the decision rendered by the court, then they may bring an appeal before the upper court (court of appeal) within two months; and then, if necessary, to the Supreme Court (also within two months).
UPDATE & TRENDSRecent developments
What are the current trends in enforcement of tax controversies? What are the current concerns of the authorities and taxpayers in relation to the enforcement and handling of tax controversies and are these likely to change? Are there proposals to change the relevant legislation or other rules?Key developments of the past year39 What are the current trends in enforcement? What are the current concerns of the authorities and taxpayers? Are there proposals to change the relevant legislation or other rules?
With France’s ratification of the Base Erosion and Profit Shifting (BEPS) project, we can observe a real strengthening of control and verification measures, particularly with regard to transfer pricing, the notion of permanent establishment and the notion of substance. In addition, anti-abuse clauses of general scope have been included in domestic law but also in some international conventions.
Finally, there is a real penalisation of cases: on the one hand, by an automatic transmission of cases involving rights exceeding a threshold of €100,000, which has given rise to the application of certain tax penalties; and on the other hand, by the extension of the notion of abuse of rights where the sanction is no longer limited to arrangements exclusively for tax purposes but also to arrangements mainly for tax purposes.