#Tax Fraud Lawyer in Paris, France

Tax fraud is the act of fraudulently evading, or attempting to evade, the assessment or payment of all or part of a tax (Article 1741 of the French Tax Code, Code général des impôts). This offence requires two constituent elements:

• a material element: deliberate failure to file a return, concealment of taxable sums, organised insolvency or any other fraudulent scheme;
• an intentional element: the deliberate intention to evade tax, as distinct from a simple error.

Tax Fraud Lawyer in Paris, France

Tax fraud is a specific criminal offence that exposes the taxpayer to heavy criminal penalties, on top of administrative penalties. Referral by the tax authorities to the prosecutor, investigation, police custody (garde à vue), search, prosecution before the criminal court: each stage requires a technical defence, coordinated between tax law and criminal law. Our firm assists individuals, business owners and companies prosecuted for tax fraud, in Paris and throughout France.

This page sets out the legal framework of tax fraud in France, the procedure for filing a complaint and the thresholds for mandatory referral, the penalties incurred, defence strategies, voluntary disclosure and coordination with administrative remedies. Each case is examined in the light of the legislation in force and the specific facts alleged.

What is tax fraud under French law?

Tax fraud is defined in Article 1741 of the French Tax Code (Code général des impôts (in French), CGI). It covers anyone who has fraudulently evaded or attempted to evade the assessment or payment of tax, in particular by deliberately failing to file a return on time, concealing part of the taxable sums, organising their insolvency or any other scheme. The intentional element is decisive: a simple oversight or a clearly unintentional error does not constitute fraud.

The main penalties are five years’ imprisonment and a €500,000 fine, and the fine can be increased to twice the proceeds of the offence. Aggravating circumstances (organised gang, use of accounts abroad, fictitious domicile, forgery, interposition of a company abroad) raise the penalties to seven years and a €3,000,000 fine. Additional penalties may be imposed: ineligibility for public office, a ban on practising, deprivation of civic rights, publication of the judgment.

The “Bercy lock” and mandatory referral to the prosecutor

Historically, only the tax authorities could file a complaint for tax fraud, after a binding opinion from the Tax Offences Commission (commission des infractions fiscales, CIF). This “Bercy lock” (verrou de Bercy) was relaxed by Law No. 2018-898 of 23 October 2018 on combating fraud. Article L. 228 of the French Tax Procedure Code (Livre des procédures fiscales (in French), LPF) now requires automatic referral to the prosecutor in certain cases where, over the audited period, the evaded tax exceeds €100,000 and penalties of 100%, 80% or, for certain conduct, 40% are applied, as well as in other cases provided for by law.

When the tax authorities refer the facts to the public prosecutor (procureur de la République), the prosecution is brought without any prior complaint from them (Article L. 228 of the LPF (in French)). Our firm anticipates this dimension from the tax audit stage, to propose an overall defence strategy that combines administrative remedies (challenging the penalties so that the referral threshold is not triggered) and preparation for a possible criminal phase.

Criminal proceedings for tax fraud in France

The investigation may be a preliminary investigation (led by the prosecutor), an in flagrante delicto investigation or one carried out under letters rogatory (investigating judge). It frequently involves searches, seizures, police custody and interviews. The National Financial Prosecutor’s Office (parquet national financier, PNF) has concurrent jurisdiction over tax fraud committed by an organised gang or carried out in particular by means of accounts, structures or a domicile abroad (Article 705 of the French Code of Criminal Procedure). Other cases fall to the territorially competent prosecutor’s office.

Depending on the case, the proceedings end with a decision to take no further action, a judicial public interest agreement (convention judiciaire d’intérêt public, CJIP) for legal entities (Article 41-1-2 of the Code of Criminal Procedure), a guilty-plea procedure (comparution sur reconnaissance préalable de culpabilité, CRPC) or referral to the criminal court (tribunal correctionnel). Depending on the file, our work aims to have the case dropped, to negotiate a CRPC or a CJIP where appropriate, or to prepare the defence before the trial court.

Defence: a coordinated tax and criminal strategy

An effective defence combines tax and criminal levers. On the tax side, challenging the penalties can reduce the basis for mandatory referral and bear on the intentional element. Article L. 80 D of the LPF requires penalties to be precisely reasoned; any deficient reasoning can be challenged. For the 40% or 80% penalty, the burden of proving bad faith or fraudulent practices lies with the tax authorities (Article L. 195 A of the LPF (in French)).

On the criminal side, the defence scrutinises the intentional element, the legal characterisation of the facts, the regularity of the procedure (safeguards in police custody, lawfulness of searches, legality of phone tapping), the limitation period (six years for major offences (délits), with a deferred starting point for hidden or concealed offences, capped at twelve years from the facts, under Articles 8 and 9-1 of the Code of Criminal Procedure) and the non bis in idem principle as assessed by the French Constitutional Council (Conseil constitutionnel) (decisions of 24 June 2016 No. 2016-545 and 2016-546 QPC, and of 23 November 2018 No. 2018-745 QPC). These decisions allow administrative and criminal penalties to be combined, but require that the total penalties do not exceed the heaviest of the penalties incurred.

Voluntary disclosure

Voluntary disclosure (régularisation spontanée) allows you to correct your tax position before an audit or criminal proceedings are launched. It involves filing amended returns for the omitted income and paying the additional tax and late-payment interest. Filed voluntarily, the amended return reduces late-payment interest by 50% (Article 1727 V of the CGI (in French)) and avoids the mandatory referral to the prosecutor under Article L. 228 of the LPF.

For assets held abroad, special regularisation procedures used to exist (the STDR, the tax authorities’ voluntary disclosure unit, closed at the end of 2017). Today, regularisations are handled under the ordinary rules: declaration of the accounts (form 3916), filing amended wealth tax returns (ISF, then IFI), filing supplementary income tax returns. A settlement on penalties may be negotiated with the tax authorities under Article L. 247 of the LPF.

Legal entities: the judicial public interest agreement (CJIP)

The judicial public interest agreement (CJIP), introduced by the Sapin II Law and governed by Article 41-1-2 of the Code of Criminal Procedure, allows legal entities implicated in tax fraud (among other offences) to enter into an agreement with the prosecutor. The CJIP involves paying a public interest fine (capped at 30% of average annual turnover, calculated on the last three known annual turnover figures), where applicable a compliance programme under the supervision of the French Anti-Corruption Agency (Agence française anticorruption), and compensation for the victim’s loss.

The CJIP extinguishes the prosecution against the legal entity without any admission of guilt or conviction on the criminal record. It requires rigorous negotiation and a carefully prepared file. We assist executives and legal departments with the overall strategy and the conduct of discussions with the prosecutor and the tax authorities.

Aggravating circumstances and related offences

Certain facts aggravate tax fraud: an organised gang, accounts opened or contracts taken out abroad, the interposition of persons or entities established abroad, the use of a false identity or forged documents, a fictitious tax domicile abroad, a fictitious or artificial act or entity (Article 1741 of the CGI (in French), second paragraph). These circumstances raise the penalties to seven years and a €3,000,000 fine.

Related offences are frequently charged: laundering the proceeds of tax fraud (Articles 324-1 and 324-2 of the French Criminal Code: five years’ imprisonment and a €375,000 fine, increased to ten years and €750,000 where the offence is committed habitually, using the facilities of a professional activity or by an organised gang), VAT fraud, forgery and use of forged documents, misuse of company assets. Laundering is established by the mere act of placing, concealing or converting the proceeds of the underlying offence; the burden of proof has been eased by Article 324-1-1 of the Criminal Code, which sets out a presumption.

How our firm assists you

Our firm acts at every stage: preparing a voluntary disclosure, assistance in police custody, defence before the investigating judge and the criminal court, negotiation of a CRPC or a CJIP, challenging administrative penalties. We work in close coordination with our tax lawyer in Paris practice to align the tax and criminal proceedings.

For wealth matters (sale, transfer of wealth, expatriation) that carry a heightened tax risk, see our page personal tax lawyer. For coordination with business matters, see tax planning lawyer for company directors.

To present your situation, please contact us via the firm’s form. Initial exchanges are covered by professional secrecy, protected by Article 66-5 of Law No. 71-1130 of 31 December 1971.

The main types of tax fraud

The offence of tax fraud covers methods that the tax authorities and the criminal courts assess case by case. Four patterns account for most prosecutions.

• failure to file: the taxpayer deliberately refrains from filing a return within the prescribed time limits;
• under-reporting of receipts: part of the sums liable to tax is concealed, where the concealment exceeds one tenth of the taxable amount or €153;
• fictitious tax domicile: a tax residence artificially located abroad conceals the tax due in France and increases the penalties incurred;
• false invoices: fictitious entries or supporting documents inflate expenses or support undue deductions, as fraudulent practices.

Penalties and limitation period for tax fraud

A person convicted of tax fraud faces five years’ imprisonment and a €500,000 fine. The fine may be increased to twice the proceeds of the offence (Article 1741 of the CGI).

The penalties rise to seven years’ imprisonment and a €3,000,000 fine where the offence is committed by an organised gang or by certain means. These include in particular accounts opened abroad, the interposition of persons or entities established abroad, the use of a false identity or forged documents, and a fictitious tax domicile. Additional penalties may also apply, such as deprivation of civic rights or publication of the judgment.

On the procedural side, the tax authorities may file a complaint until the end of the sixth year following the year in which the offence was committed (Article L. 230 of the Tax Procedure Code). Criminal penalties are cumulative with the penalties and late-payment interest applied by the tax authorities.

Frequently asked questions

What counts as tax fraud in France?

Fraudulently evading the assessment or payment of tax by deliberately failing to file, concealing taxable sums, organising insolvency or any other intentional scheme (Article 1741 of the CGI). The intentional element distinguishes fraud from an error or an unintentional omission; investigators and the court must establish it.

What is the limitation period for tax fraud in France?

Six years for major offences (Article 8 of the French Code of Criminal Procedure), from the day the offence was committed. For a hidden or concealed offence, the period runs from its discovery, but cannot exceed twelve years from the facts (Article 9-1 of the same code). On the tax side, the tax authorities’ reassessment period is three years under the general rule, extended to ten years for undisclosed activities and undeclared assets abroad (Article L. 169 LPF).

Who should you contact to report tax fraud?

The tax authorities can be contacted in writing (the competent tax office, the National Directorate of Tax Investigations). In some cases, the dedicated government platform or the public prosecutor can be alerted. Whistleblowers have had a protection regime since the Sapin II Law, strengthened by the Law of 21 March 2022. Our teams advise stakeholders on the procedure to follow and the related safeguards.

What are the penalties for proven tax fraud?

Five years’ imprisonment and a €500,000 fine, up to twice the proceeds of the offence. Seven years and €3,000,000 where there are aggravating circumstances. Additional penalties may be imposed (ineligibility, ban on practising, publication of the judgment, deprivation of civic rights). Administrative penalties (40%, 80%, 100%) and late-payment interest come on top.

Can you regularise your position before being prosecuted?

Yes. Voluntary disclosure involves filing amended returns and paying the omitted tax. Filed voluntarily, before the reassessment period expires and with payment of the tax, the amended return reduces late-payment interest by 50% (Article 1727 V of the CGI). It also avoids the mandatory referral to the prosecutor (Article L. 228 of the LPF). Involving a lawyer gives the process a sound structure.

What is the difference between tax fraud and abuse of law?

Abuse of law (Articles L. 64 and L. 64 A of the LPF) is a tax characterisation that allows the tax authorities to disregard a fictitious act or an act with an exclusively (L. 64) or mainly (L. 64 A) tax-driven purpose. Abuse of law under Article L. 64 triggers an 80% penalty, reduced to 40% where the taxpayer was neither its main initiator nor its main beneficiary (Article 1729 b of the CGI). It is not, in itself, a criminal offence. Tax fraud requires a proven intentional element and fraudulent acts; it is prosecuted in the criminal courts. Both characterisations may be combined in some cases.

What is a CJIP and when is it available?

The judicial public interest agreement (Article 41-1-2 of the French Code of Criminal Procedure) allows a legal entity implicated in an offence to extinguish the prosecution, without admission of guilt or a criminal record, in return for a fine (up to 30% of average turnover over three years for tax fraud), a compliance programme and compensation for the victim. It requires a proposal from the prosecutor and the legal entity’s consent, followed by approval by the president of the court.

Does professional secrecy cover exchanges with my lawyer on tax matters?

Yes. The lawyer’s professional secrecy (Article 66-5 of the Law of 31 December 1971) is general, absolute and a matter of public policy. It covers consultations, correspondence and documents, including on tax matters. It is an essential tool for preparing a defence or organising a voluntary disclosure in a confidential setting, before any decision to approach the tax authorities or the prosecutor.

Every situation is different: the information on this page is general and does not replace legal advice tailored to your case. The firm makes no promise of outcome; it commits to the means it deploys.