French minister Michel Sapin
4 March 2016

Fighting tax fraud: record return of €21.2bn in 2015

The fight against tax fraud reached a record high in 2015, exceeding the €20bn-mark for the first time with regard to notified adjustments to reach €21.2bn (+18% in 2 years). The amounts recovered by the State are also on the increase, having reached €12.2bn (+21% in 2 years) - more than the budgets for justice, culture and developmental aid. These results have not come about by chance; indeed, monitoring systems have been stepped up and 70 measures introduced in 4 years. These efforts will be maintained, notably with regard to fighting international tax optimisation and VAT fraud. This condition is vital for ensuring that the principle of equal taxation is upheld.
Content published under the Government Valls III from 2016 11th February to 2016 06th December
 
The fight against tax fraud reached a record high in 2015, exceeding the €20bn-mark for the first time with regard to adjustments.
 
  • Over the course of the year, the value of the adjustments notified by the authorities reached €21.2bn, that is €1.9bn more than in 2014 and €3.2bn more than in 2013 - an increase of 18% in 2 years.
 
  • An increase was also observed in the amounts actually recovered by the authorities, which increased by 17% to €12.2bn, as opposed to €10.4bn in 2014 and €10.1bn in 2013 (+21% in 2 years).
 
  • By way of comparison, "€12bn is more than the justice, culture and developmental aid budgets and equal to what the Ministry of the Interior spends on ensuring the security of the French people", Christian Eckert said.
 
Christian Eckert reiterated the fact that these results were not achieved by chance; in fact, monitoring systems have been stepped up every year since 2012 (70 measures in 4 years). The progress made over recent years has even been welcomed by the Court of Accounts:
 
  • Controls are better targeted and directed at the most serious of offences. In actual fact, they have decreased in number from 51,740 operations to 50,168 (-3.1%). The highest levels of adjustments have been observed in the field of corporation tax, with an additional €1.6bn (€5.8bn). Adjustments on income tax have increased from €2.3bn to €2.7bn whilst those on VAT have decreased slightly from €2.3bn to €2.2bn.
 
  • Inspections performed by the National and International Tax Audit Directorate (DVNI), which controls all taxes, duties and contributions payable by companies generating a turnover of over €150m, have resulted in the recovery of €5.8bn (+37% in 1 year). "We need to put a stop to this idea that the return on tax controls is based on targeting smaller taxpayers. That's not true! The return on tax controls is based primarily on large companies", Christian Eckert declared.
 
  • The 159 agents from the Offshore Disclosure Unit (STDR), created in 2013, which enables taxpayers with an undeclared account in a foreign country to rectify their situations, brought in €2.65bn for the State in 2015, as opposed to €1.9bn in 2014.
 
As far as Michel Sapin is concerned, such efforts must "be given greater scope, in the framework of fighting excessive tax optimisation, and be supported by greater familiarity with international financial flows between affiliated companies". The aim, for example, is to control transfer prices, which is international financial flows corresponding to services and sales between companies within the same groups by means of systems such as country-based reporting and the exchange of information with G20 and OECD partners.
 
Finally, efforts to fight VAT fraud will be stepped up. Data mining tools, which make it possible to simultaneously analyse all of the data pertaining to the various authorities, will improve results.
 
Fighting tax fraud is a major issue with regard to sovereignty and straightening up public accounts, and is vital to ensuring that the principle of equal taxation is upheld. Such fraud is detrimental not only to national solidarity, by leaving those taxpayers that fulfil their tax-related obligations to account for all tax revenue, but also to the conditions of fair competition between businesses.
 

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