The 17 tax schemes published the 1st April 2015 qualified as fraudulent or abusive by the French Tax Authority (FTA) are the followings:
- Management package
- Tax deductibility of dividends (issuance of convertible bonds)
- Relocation of profits following a restructuring
- Unjustified payment of commission
- Fictitious reduction of the tax basis of French Wealth Tax
- Undisclosed foreign wages
- Misappropriation of commissions in favour of a manager
- Fictitious relocation of workforce
- Treaty Shopping
- Non-application of withholding tax on dividends
Double deduction of loan interest
Bypassing territoriality rules related to transfer duties
- Non-application of VAT on concealed services
- Abusive use of a PEA ( Share Savings Plan)
- Abusive use of a PEA ( Share Savings Plan) through a company
- Non-application of VAT on Internet sales
- Income excluded from the capping mechanism of the French Wealth Tax.
Each scheme, together with the grounds of reassessment, are broadly explained in the press folder released by the French tax authorities on their website. Other schemes are to be published.
The French tax authorities intend to reassess taxpayers that have put in place such schemes thanks to the procedure for abuse of law or direct reassessment.
Therefore, reassessments may be fined with penalties for abuse of law (80%), fraudulent acts (80%) or willful misconduct (40%).
The French tax authorities recommend taxpayers spontaneously regularizing their tax position before any tax audit.
Decrease of penalties may be negotiated case by case. However, it has to be feared that the French tax authorities would criminally hold directors liable