A man with an attaché-case going in a building
8 November 2017

Paradise Papers: efforts to crack down on tax fraud, avoidance and optimisation must be unrelenting

The Government issues a reminder that tax fraud is a blatant violation of the Republican pact. For each and every revelation in the "Paradise Papers" implicating a French business or taxpayer, an investigation will be carried out and legal proceedings instituted where the allegations prove to be true.
The overwhelming advantage of the Paradise Papers, just like the Panama Papers before them, is that they draw the whole world's attention to the practices of tax fraud and avoidance and, in this way, increase international pressure on all countries to step up their cooperation and put paid to such opaque practices. The fraudsters now know that not only do States have their eye on them, but journalists and whistleblowers do too.
The Government has not waited for these revelations to come to light before taking action.
  • At international level, France has already been a driving force in the fight for transparency for some ten years now. Most recently it played an active part in June's adoption of the OECD Multilateral Convention to clamp down on tax optimisation, with clear-cut anti-abuse clauses, shared by more than 70 countries. It is also behind the current European initiative on taxation of the digital economy, a cause to which a dozen Member States have so far rallied.
  • At national level, France seeks to set the example. It exchanges information with over 160 countries. Tools are being strengthened, with the new global standard on Automatic Exchange of Information (AEOI) on the financial accounts in 49 States, including all of the European Union (EU) Member States, and some one hundred from 2018, among them Switzerland and Panama. France’s Offshore Disclosure Unit (STDR), which, since 2013, has enabled taxpayers with undeclared assets abroad to bring their tax affairs up to date with reduced fines, will be closed on 31 December 2017. 
But these revelations need to prompt us to go further.
  • The agreements on the exchange of information are a step in the right direction. Whether they are complied with is another matter. It is therefore necessary to impose sanctions on those countries that have committed to participating, but do not, for example by making their access to funds from such major international bodies as the IMF or World Bank conditional on this participation. It is also necessary to identify those countries that continue to play by their own rules. By the end of the year, the EU needs to obtain a list of non-cooperative jurisdictions, with appropriate sanctions.
  • At national level, the Government intends to further scale up the effectiveness of its action, adopting a mindset of zero tolerance when it comes to fraudsters. The Government would particularly like to bolster the means available to the authorities to target their inspections – for this is the key to effective tax auditing. This will form a priority of the plans to modernise central administration in the context of the 2022 Programme for Public Action.