In a context of increasing tax settlements between tax authorities and multinational corporations, Sherpa has begun a procedure before the French Council of State for abuse of power.
Tax settlements or “règlements d’ensemble” are an obscure practice in which the tax administration and a taxpayer come to an agreement when faced with a situation of potential fraud. This agreement implies the reduction or complete derogation of not only the penalties incurred, but also the taxes originally owed.
This practice is increasingly being used : in 2019, the French Ministry of Economy and Finance settles 116 cases with fiscal settlements for a total of 1.6 billion euros, 1.1 billion of which directly resulted in a tax reduction. The amount in question surpassed the 3 billion mark : the tax disputes resolved this way concerned around 2,4 billion euros evaded and 770 million euros of penalties.
As such, several billions in tax revenue are relinquished by tax authorities, notably profiting multinational corporations sur as Google and McDonalds.
This practice, violating existing fiscal procedures and lacking a regulatory legal framework, is illegal. Additionally, in facilitating waiving tax recovery and straining the national budget, this practice violates the fundamental social rights of citizens, and the principle of tax equality.
To put an end to this opaque practice, Sherpa has initiated a procedure with the French Council of state and will stay vigilant concerning the use of this practice by the Ministry of Economy and Finance.
