Positive results for the fight against tax evasion in 2021

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Bercy draws up the inventory of tax audit actions for the past year. The tax administration highlights the increase in the rights and penalties recalled, the effectiveness of the control a priori and a posteriori Covid-19 aid, the growing use of artificial intelligence and the development of calmer relations with taxpayers.

Bercy has just presented the 2021 results of the fight against tax fraud. After a mixed year in 2020 due to the pandemic, which had a major impact on tax audit activities, the fight against tax evasion not only returned to its pre-health crisis level but is approaching the excellent results obtained in 2019.

A year of recovery

The year 2020 was marked by the health crisis which led to the suspension of on-site tax inspections from March to June, these having resumed only very gradually from July 2020. From March 17 to May 11, 2020, during the first period of confinement, the tax audit services focused on documentary examination, with priority on high-stakes heritage files. Given the health rules, relations with taxpayers during on-site checks were interrupted during this period. Controls initiated before the period of the state of health emergency resumed from July 2020 according to the priorities identified. The resumption of tax control activities, in a context of weakening of many economic sectors, resulted in an increase in the proportion of regularizations and targeted procedures and the refocusing of more cumbersome procedures on the most fraudulent situations or the most complex, as well as on heritage aspects.

The new orientations of tax audit

In 2021, controls mainly concerned VAT fraud for businesses and asset fraud for individuals. In total, no less than 13.4 billion euros were notified to individuals and businesses, with a parallel of 10.7 billion euros in evaded taxes that were collected during this financial year, and this despite a year 2021 still largely disrupted by restrictions linked to the health crisis. In total, the rights related to on-site tax audits, concerning individuals and companies, i.e. a total of 7.8 billion euros, increased by 6% compared to the year 2029. Rights related to tax audits on documents concerning individuals and businesses, i.e. a total of 5.6 billion euros, increased by 30% compared to 2019.

Effectively fight against fraud

About 30% of on-site inspections resulted in the application of exclusive penalties in good faith and the DGFiP referred 45 cases to the tax police, a figure up 10% compared to last year. In addition, the year 2021 made it possible to return to the trajectory started in 2019, with more than 1,200 mandatory denunciations of acts of tax evasion transmitted to the public prosecutor’s offices (+ 25% compared to 2019) for a total amount of tax €540 million (approximately €340 million at December 31, 2019, i.e. an increase of +37%). A total of 1,620 tax evasion cases (tax evasion + tax fraud) were sent to the public prosecutor’s office, to which are added 2,500 complaints for solidarity fund fraud, i.e. a total of 4,152 cases of public finance fraud for which the DGFiP seized the judicial authority in 2021.

The growing importance of data mining

These very good results are also the result of the efforts undertaken for several years by the DGFiP to strengthen its arsenal of mass data analysis (data mining) which, by cross-referencing the many data held by the tax administration, makes it possible to better target tax audits. The fight against fraud and tax evasion requires the use of data analysis in the programming of tax audits. The Fraud targeting and claim enhancement project modernizes the targeting of tax audits using the techniques of data mining, which consists of analyzing and cross-checking information in order to identify fraud profiles. Thanks to the decompartmentalization and sharing of data, the data mining makes it possible to detect simple anomalies or to enrich and automate certain queries. In 2020, nearly one in three checks was targeted using artificial intelligence techniques. In 2021, 45% were engaged and expedited following a big data analysis. In 2020, 794 million euros in duties and penalties were recalled thanks to the data mining. In 2021, the data mining enabled the notification of 1.2 billion euros in duties and penalties. The growing importance of data mining in tax audits is consistent with the objectives that the DGFiP has set itself in this area.

Control of Covid-19 aid

The year 2021 was also marked by solidarity fund fraud. The control services have made a major contribution to the repression of fraud in the area of ​​public aid, in particular with regard to the solidarity fund. This device was initially intended to support very small businesses and professionals affected by the first confinement. Its scope has continued to expand to now cover companies of all sizes affected by administrative closures or particularly affected by the crisis. If the aid granted when it was created amounted to 1,500 euros per month, from December 2020, it could reach 200,000 euros. Automated control systems intended to prevent fraud have been put in place. In addition to a first level of consistency check between the form and the information already held by the DGFiP, from July 2020, a post-payment control system for the eligibility rules has been put in place. A control operation was initiated in 2021 and made it possible to claim aid wrongly received from more than 8,000 companies. Given the importance of the fraud identified, complaints are filed with the judicial authority. In addition, a significant part of the checks of the solidarity fund have been automated and carried out a priori. They have thus made it possible to dismiss more than 2.5 million unfounded claims and to avoid the undue payment of more than 10 billion euros in aid.

The development of peaceful relations with taxpayers

In addition to cracking down on tax evaders, tax audit missions also give priority to supporting taxpayers in good faith. In this regard, 43,000 cases ended peacefully, with a regularization during the documentary check. In 2019, the law for a State at the service of a trusting society, known as ESSOC, established, in all relations with the administration, a right to regularization in the event of an error. A person acting in good faith cannot be subject to a sanction if he has regularized his situation on his own initiative or after having been invited to do so by the administration within the period indicated by the latter. The principle already applied in tax matters, but the law encourages its dissemination to taxpayers by providing for a 50% reduction in late payment interest in the event of spontaneous filing by the taxpayer in good faith of an amending declaration. Individuals now have a 30% reduction in late payment interest in the event of regularization under control, a reduction previously reserved for professionals.

Dedicated offers for businesses are growing

Bercy has set up personalized tax support for SMEs. This offer includes intervention by the tax administration, at the company’s request, either for recurring operations with high financial stakes, or at key stages of economic development, or restructuring of a company (repurchase of a company, definition of a sale price, asset valuation method, withdrawal from an activity, aid to a related company, international development requiring tax expertise with regard to the stipulations of one or more tax treaties …). It also includes help in diagnosing the main tax issues to be addressed. The tax administration undertakes to respond in writing and as soon as possible, adapting to the schedule of economic and tax deadlines for the company. In 2021, 460 additional companies benefited from personalized tax support. In total, 827 SMEs are now supported. For ETIs and large companies, Bercy has developed a partnership offer in order to respond in a secure manner to the tax issues that they identify as presenting a legal and financial risk. The administration undertakes to examine the tax treatment of certain operations identified sufficiently in advance in relation to the declarative or operational deadlines. In addition, it mobilizes a contact person dedicated to the company in order to develop a better knowledge of its activity and its characteristics and to create greater mutual trust between the two parties. This work gives the company legal certainty, enforceable against the administration, on the tax issues that have been examined. In 2021, 10 new groups joined the tax partnership dedicated to large companies.

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Positive results for the fight against tax evasion in 2021


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