Roche & Cie

Bercy adds three new patterns to the list of abusive tax schemes

19 Sep 2016

As a reminder, on April 1, 2015, Bercy published on the website of the DGFIP a list of 17 abusive tax schemes and practices, announcing also that other arrangements would be announced later.

On September 14 (2016), the national committee to fight against fraud updated this list by including three new fraud practices ( which can be downloaded)

Scheme implemented

A resident of France, Mr. A, would add 100 000, which have not been declared, on an open account in a foreign country, X. To this end, Mr A contacts an intermediate B in France whom he gives the money in cash.

This intermediate contacts another via C in a State X, depositing an amount of EUR 100 000, minus a commission of 5 000, in the account opened abroad.
There is no actual transfer of funds or between A and C, or between two intermediate B and C.
The two intermediate B and C then adjust them this benefit by offsetting with other services provided through B.
In total, the sum of 100 000 is paid in the country of departure (F) in B. Mr. B and Mr. C have received a fee. Mr. A has 95 000 euros abroad for its customers. C has a credit of EUR 95 000 in France with B.

Scheme implemented

A company, knowing under-capitalized and slope of interests related to enterprises exceeding the three aforementioned ratios, was circulated by the tax-consolidated subsidiaries, issuing dividends and bonuses to increase the amount of its thus accounting products of its equity and improve its debt ratio.
The improvement in the debt ratio allowed the deductibility of a larger amount of financial expenses.
Financial income received by the company have been fully exempt under the participation exemption regime. True, the share of costs and expenses was reinstated in its results but was offset at the overall group result.
These distributions were followed immediately by an increase in cash of the same amount in the capital of subsidiaries.

Scheme implemented

Company A owns 100% of company B whose net assets is negative. Company A which intends to absorb Company B, undertaken before the merger, a capital increase whose purpose is to reduce the negative net assets of the subsidiary at a value close to zero, in order to to avoid falling into the scope of Article 209 bis of the CGI II. Once the merger is done, it infers a loss to cancel shares, corresponding to a true Mali (short term since deduction relating to the securities issued in the very recent capital increase).

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