The 2024 finance law and the new offense of providing instruments to facilitate tax fraud

Continuing its increasingly stringent fiscal policy, the government has obtained, with the vote of the 2024 Finance Law, the establishment of a new offense aimed at combating tax fraud, particularly against the chain of individuals and entities whose actions may facilitate the commission of a tax fraud offense: the offense of providing instruments to facilitate tax fraud.

Before the introduction of this new provision, prosecutions brought against creators of tax schemes serving taxpayers were primarily based on provisions relating to complicity in tax offenses (Article 1740 A bis of the General Tax Code) or those relating to complicity in tax fraud (Article 1742 of the General Tax Code).

Now, under Article 1744 of the General Tax Code, the provision, whether free of charge or for a fee, of one or more means, services, acts, or legal, fiscal, accounting, or financial instruments aimed at allowing one or more third parties to fraudulently evade the establishment or payment in full or in part of taxes constitutes an offense.

The legislator aimed to precisely determine the acts punishable by the new law. Thus, it provides for :

• the opening of accounts or the subscription of contracts with organizations established abroad,
• the interposition of natural or legal persons or organizations, trusts, or comparable institutions established abroad,
• the provision of false identity or false documents within the meaning of Article 441-1 of the Penal Code, or any other falsification,
• the provision or justification of a fictitious or artificial tax domicile abroad,
• any action intended to mislead the administration. Furthermore, supporting the trend initiated by the Law of October 23, 2018, relating to the fight against fraud, which was concerned with granting greater autonomy to the Public Prosecutor’s Office in the prosecution of tax fraud, prosecutions for this offense are at the sole discretion of the latter, who is therefore not bound by any obligation to the Tax Administration nor subject to the prior filing of a complaint by it.

Individual defendants found guilty of this offense face a sentence of 3 years’ imprisonment and a fine of 250,000 euros, increased to 5 years’ imprisonment and 500,000 euros fine when the provision is made using an online public communication service.

As an additional penalty, they incur the penalties provided for in Articles 1741 and 1750 of the General Tax Code.

Legal entities found guilty incur a fine equal to five times that provided for natural persons (Articles 131-37 and 131-38 of the Penal Code), as well as additional penalties (Articles 131-39, 1° to 6°, 9°, and 12° of the Penal Code).

Finally, prosecutions for providing instruments to facilitate tax fraud shall not be cumulative with those for complicity in tax offenses (Article 1740 A bis of the General Tax Code).

Tax schemes involve numerous actors, especially those from the advisory world (lawyers, accountants, banks, etc.). These new provisions should encourage each of them to act in full knowledge of the legal and economic environment presented to them, by requiring the communication of any useful information to ensure that they do not contribute to a ultimately fraudulent project.

In doing so, the legislator has increased the need for control and caution among professionals themselves, giving this new offense a visible facet, and another more insidious one.

By Sahand SABER – Lawyer at the Paris Bar