Tax

Under-Fire French Government Targets Tax-Avoiding Executives

Tom Burroughes Group Editor 2 January 2019

Under-Fire French Government Targets Tax-Avoiding Executives

The tax practices of certain executives in France are being targeted by an administration trying to recover after a bruising controversy over fuel duty and other measures.

The French president Emmanuel Macron, who is under fire for fuel duty tax hikes that have given rise to violent disorder in recent weeks, is mulling a tax crackdown on executives, media reports said. 

The French government is looking at the tax situation of business leaders and will take measures to force them to pay their taxes in France if necessary, Budget Minister Gerald Darmanin told the Journal du Dimanche newspaper, according to a translation of the report by Bloomberg.

“Heads of listed businesses or businesses in which the state has a stake must absolutely be French tax residents,” Darmanin was quoted as saying.

The move is, as the report noted, a political step by a government attacked recently for inflating living costs and piling new taxes on the general population.

The Macron administration has been berated in some quarters for being a government for the “rich” because of its repeal of a wealth tax and attempts to liberalise the country’s labour market. The French state takes more than half of all gross domestic product, one of the highest ratios in the European Union. (The EU average spend/GDP ratio is about 46 per cent.) By contrast, the UK’s ratio is 42.2 per cent (source: OECD).

Such reports also underscore how lines between tax evasion, which is typically a crime in countries, have been blurred with tax avoidance, which is not.

 

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