Analyse
14 juillet 2018

Le monopole de l’administration fiscale française sur la fraude fiscale en péril (En anglais)

Bastille Day Newsletter 2018 - What’s Hot

 

Parliamentarians have been challenging the legitimacy of the tax administration’s (aka ‟Bercyˮ, the neighborhood where the building is) monopoly on tax fraud since 2012 but without much success so far1. Current debates before the National Assembly however could put in jeopardy such prerogatives and grant more power to the Judiciary.

A monopoly under criticism

• Bercy’s prerogatives in jeopardy

Under French law, the procedure for tax offenses derogates from the one defined in the Code of Criminal Procedure. Unlike ordinary criminal procedures, the Public Prosecutor may not initiate criminal proceedings2. To do so, the Public Prosecutor must obtain the approval of the French tax authorities, commonly referred to as “Bercy”, first3. Because this provision is of public order, the prosecutor may not bypass Bercy without fearing an annulment of the entire proceedings4.

With regard to tax fraud offenses, the executive branch has a hold on the procedure. To decide whether the case should be prosecuted, the Ministry of Budget must refer the case to the Committee on Tax Offenses (known as CIF)5. CIF will then look at the facts and will issue a favorable or unfavorable opinion as to the opening of criminal proceedings6. If CIF issues a favorable opinion, the Minister will have no other choice than filing a complaint7.

As this monopoly might limit the prosecution of tax fraud cases, many unions and non-profit organizations asked for its suppression during the parliamentary debates on a bill aiming at reforming public finances and improving transparency8. In January 2018, the parliamentary Commission of Finance mandated an Investigation Committee (mission d’information) to determine whether it was necessary to put an end to this monopoly9.

• A heavy flow of criticisms

Interviewed by the Investigation Committee, members of the judiciary heavily criticized Bercy’s monopoly. The Head of the National Financial Prosecutor (PNF), Ms. Eliane Houlette, even stated that this monopoly infringes the constitutional principle which allows the prosecutor office to freely press charges against an individual10. Furthermore, this distinctive feature would paralyze the entire criminal proceedings.

Indeed, out of 50,000 tax fraud cases, the CIF only reviews approximately 1,000 files: 95% of these files will receive a favorable opinion and 93% will be prosecuted11. In other words, only 883 cases out of 50,000 will be brought before a judge. For some magistrates, this situation is even more frustrating as the executive does not review suspicious case submitted by the prosecutor office12.

Although some members of the judiciary do recognize that this monopoly is a way to address tax fraud issues in a fair and equal manner, the decision-making process should be more transparent and give more leeway to prosecutors13. In its last annual report, the Cour des Comptes14 criticized the lack of transparency in tax transactions15. Despite criticisms, the executive has fiercely defended its prerogatives before the Investigation Committee.

The French tax administration seeks to tighten its grip on tax fraud prosecutions

• Bercy’s monopoly: an effective anti-tax fraud mechanism?

After hearing members of the judiciary, the Investigation Committee gave the floor to members of the tax administration. After reaffirming that the executive and the judiciary do work hands in hands, Bruno Parent, General Director of the Public Finances, answered the criticisms uttered by Ms. Houlette. For Mr. Parent, the tax administration cooperates fully with the judiciary16. He then reminded the Committee that CIF was composed of magistrates and individuals appointed by the Parliament17.

If the executive recognized that only a small number of tax fraud cases are brought to the Prosecutor Office, Bercy does not forget the 98% of tax fraud cases remaining18. Indeed, aware that the judiciary does not have the resources to prosecute each tax fraud case, the tax administration would rather issue penalties instead. Thus, the tax administration issued 15,065 tax penalties last year19.

Furthermore, the executive’s anti-tax fraud policy does not aim at prosecuting, but rather at deterring. Therefore, only recidivists should face judicial prosecution20.

By suppressing Bercy’s monopoly, the executive fears it would end the open dialogue between taxpayer and the tax administration. Fearing heavy sanctions, taxpayers would not cooperate fully to regularize their situation, thus rendering anti-tax fraud policies even more ineffective21.

• A better cooperation for a more effective anti-tax fraud policies

After hearing both arguments and be informed by the current government that it was against a full suppression of Bercy’s monopoly, the Committee issued an advisory opinion on whether Bercy’s monopoly should be suppressed. Although the Committee did not provide a clear answer, it issued recommendations aiming at reducing the opacity surrounding the tax administration and improving the judicial efficiency with regard to tax fraud prosecution22. The Bercy’s monopoly is so maintained but should lean towards more transparency.

Even though, there is an impossibility to prosecute all tax fraud cases, the Committee recommended to grant more power to judges23. The judiciary should go beyond the instructions given by Bercy. Thus, if the defender committed additional or previous tax fraud offenses, the PNF should be able to include such offense in its complaint24. The judiciary should also have jurisdiction on tax fraud offenses when the latter are correlative of other offenses25.

In its recommendation, the Committee however did not take a stand in favor of one or the other party. The report advocates for a more effective cooperation between Bercy and the PNF. If the prosecutors should forward more tax fraud cases to the tax administration, Bercy should also ensure appropriate follow-up to these cases26.

During the review phase, tax administration officials and prosecutors would work together to decide which case should be brought before a judge. Such provision however would reduce CIF’ scope of action27. As an alternative solution, CIF would review cases which meet the requirements set by the law (and not by Bercy), and would issue an advisory opinion28. Then, the prosecutor office would have a full autonomy to decide whether the case should be brought before a judge29. Therefore, if all the recommendations are adopted by the Parliament during the next session, the judiciary will gain new prerogatives undermining Bercy’s.

* * *

The monopoly of tax administration on tax fraud cases is a distinctive feature of the French system. The judiciary, and members of the civil society however heavily criticized such monopoly as it leads to opaque practices and impunity. Bercy explained that this practice aims at deterring and obtaining tax penalties not at prosecuting. Despite Bercy’s strong arguments to conserve its monopoly undisturbed, the Committee issued many recommendations aiming at implementing a better cooperation between the judiciary and the executive and reinforcing prosecutors’ prerogatives. Bercy still has chance to keep its monopoly as the Parliament must vote in disfavor of these recommendations.

Contenu similaire

Publication
Livre blanc - L'enquête interne en matière sociale
15 juillet 2022
Livre blanc Enquête interne en matière sociale
L’appréhension par la matière sociale de l’enquête interne. Dans le contexte du développement de la pratique de l’enquête interne ces dernières années en Fra...
Analyse
Lobbying les obligations déclaratives des représentants d’intérêts en France
14 juillet 2022
Lobbying : Les obligations déclaratives des représentants d’intérêts en France
Mise en lumière des obligations déclaratives imposées aux représentants d’intérêts en France, prévues par la loi n° 2013-907 du 11 octobre 2013 modifiée par la...
Actualité
ABA
6 décembre 2022
Lancement du guide international des enquêtes internes en entreprise
NAVACELLE co-organise le lancement du guide ABA à Dubaï aux côtés de Al Tamimi & Company, Bär & Karrer et Cadwalader, Wickersham & Taft LLP.
Revue de presse
Week of 28 November 2022
2 décembre 2022
Revue de presse – Semaine du 28 novembre 2022
Cette semaine vous découvrirez plusieurs évènements judiciaires importants : la Cour de cassation a apporté des précisions sur la qualité de victime d’un acte de ...
Revue de presse
Revue de presse - Semaine du 21 novembre 2022
25 novembre 2022
Revue de presse – Semaine du 21 novembre 2022
Cette semaine vous découvrirez l’ouverture d’une enquête préliminaire du parquet national financier pour détournement de fonds publics. Par ailleurs, vous trouver...
Événement
Ifaci demain en main - vignette
24 novembre 2022
Table ronde – Allégations & Enquêtes
Stéphane de Navacelle participera à la conférence annuelle de l'IFACI " Demain en mains " sur le thème Allégations - Enquêtes, lundi 28 novembre 2022.
Analyse
23 novembre 2022
La CJUE limite la conservation généralisée des données en matière de surveillance
Le 20 septembre 2022, la Cour de justice de l’Union européenne a rendu deux arrêts concernant les conditions dans lesquelles les Etats membres sont autorisés à cons...
Analyse
21 novembre 2022
CJIP Crédit Suisse pour blanchiment aggravé de fraude fiscale et démarchage illicite
Le Crédit Suisse échappe aux poursuites judiciaires et accepte le paiement d’une amende d’intérêt public de 123 000 000 d’euros dans le cadre de la 13ème CJIP ...
Revue de presse
Revue de presse - Semaine du 14 novembre 2022
18 novembre 2022
Revue de presse – Semaine du 14 novembre 2022
Cette semaine vous découvrirez trois évènements marquants : la première condamnation en France d’un ancien chef rebelle libérien par la cour d’assises de Paris, ...
Analyse
Autorité de la concurrence - Google
18 novembre 2022
Les récentes sanctions de Google par l’Autorité de la concurrence : serveurs publicitaires et droits voisins
En 2021, l’Autorité de la concurrence a infligé plusieurs amendes à Google pour s’être livré à des pratiques anticoncurrentielles liées d’une part à la rém...
Événement
17 novembre 2022
Identification des acteurs contractuels de la Compliance
Julie Zorrilla est intervenu à la Colloque "Contrat et compliance : les acteurs et leurs stratégies" à l'Université de Nîmes.
Événement
17 novembre 2022
Cambridge Forum : L’assistance juridique mutuelle s’est dévoyée !
Pourquoi se préoccuper des traités d'entraide judiciaire quand le droit local est mondial et que les procureurs échangent des informations sur WhatsApp ?
Revue de presse
Revue de presse - Semaine du 7 novembre 2022
14 novembre 2022
Revue de presse – Semaine du 7 novembre 2022
Cette semaine, vous trouverez des précisions apportées par la Cour de cassation sur la légalité d’une extradition d’un ressortissant de l’Union européenne vers...
Événement
9 novembre 2022
Webinaire : Une approche comparative du secret professionnel dans les procédures pénales
Stéphane de Navacelle est intervenu lors du webinaire Mondaq /Monfrini Bitton Klein sur le "secret professionnel et le "attorney-client privilege" dans les procédures p...