French Tax Audits Harvest EUR14.7bn

by Ulrika Lomas, Tax-News.com, Brussels

03 August 2010

The French Budget Ministry has recently published the 2009 annual activity report produced by the Public Finances General Directorate (la Direction générale des finances publiques – DGFiP), revealing that the French tax administration generated in the region of EUR14.7bn in 2009 as a result of both documentary and on-the spot tax audits conducted that year.

Although this figure is indeed less than figures for the two previous years (EUR15.2bn was recovered in 2008 and EUR16.4bn in 2007), French Budget Minister François Baroin also confirmed recently that an additional – and final – sum of EUR1bn was recovered last year by the special tax unit, set up to regularize illegal accounts of French residents. This administrative unit was set up in April 2009 in the wake of the G20 summit meeting in London, and enabled French residents with assets illegally held offshore to repatriate their assets, and to settle their accounts safe in the knowledge that they would benefit from favourable conditions.

Breaking down its figures in the report, the DGFiP details the fact that documentary tax audits, conducted from their offices, accounted for approximately EUR4.8bn of the additional revenue recovered last year from tax audits (compared to EUR5.6bn in 2008 and EUR5.9bn in 2007). This slight decrease may well be attributed to the positive effect that issuing pre-printed declaration forms has had.

The DGFiP notes that around 51,000 on-the-spot tax audits served to generate EUR9.9bn in taxes and penalties in 2009, representing a slight increase from 2008 (EUR9.6bn) even though the number of spot checks carried out was approximately the same. On-the-spot tax audits involved almost 48,000 businesses in France in 2009, as opposed to only 3,912 individuals. According to figures contained in the report, the ministry initiated 939 criminal proceedings for tax fraud last year.

The report also shows a clear increase in the number of applications submitted by taxpayers requesting tax relief, with 966,000 requests (demandes gracieuses) submitted last year. This 9% increase reflects the financial difficulties experienced by taxpayers as a result of the economic crisis.

Recommended