This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors.
On 28 August 2024, the French Tax Authorities (FTA) published guidelines on the new criminal offense of facilitating tax evasion introduced by the 2024 Finance Law (article 1744 of the French Tax Code (FTC)), which applies as from 1 January 2024.
Scope of the offense
The provision of one or more legal, tax, accounting, or financial means, services, acts, or instruments, free of charge or for a fee, the purpose of which is to enable one or more third parties to fraudulently evade the assessment or payment of all or part of a tax will be punishable by three years’ imprisonment and a EUR 250,000 fine, with potential for increased penalties, as further discussed below.
The FTA points out that all taxes mentioned in the FTC are covered.
The notion of “means, services, acts, or instruments” includes:
- Opening accounts or subscribing to contracts with foreign entities;
- Interposing an individual, legal entity, organization, or trust established abroad;
- Providing a false identity or any other forgery;
- Providing or justifying an artificial tax domiciliation abroad; or
- Undertaking any other maneuver intended to mislead the FTA.
The FTA guidelines provide several examples of what may constitute the offense.
Prosecution of the offense
Prosecutions may be initiated solely by the public prosecutor, without any prior action by the FTA (although the FTA may file a complaint). The statute of limitations is six years from the day on the offense was committed.
Penalties
Offenses are punishable by three years’ imprisonment and a EUR 250,000 fine, which may be increased to five years’ imprisonment and a EUR 500,000 fine when the services are provided online.
Additional criminal penalties may apply to individuals (for example, disallowance of tax credits or tax reductions, prohibition from practicing a professional activity, or suspension of driving license).
Legal entities may face fines equal to five times those applicable to individuals, as well as additional penalties, such as, for example, forced dissolution, permanent or temporary prohibition to carry out their activities, or permanent or temporary closure of their establishments.
