In brief
Criminal tax lawyer in Paris: who does the firm act for?
Me Mehdy Kadri, a criminal defence lawyer in Paris, defends executives, individuals and companies targeted by a complaint from the tax authorities, an investigation by the National Financial Prosecutor’s Office (PNF) or proceedings for tax fraud, laundering the proceeds of tax fraud or VAT fraud, from the tax audit through to trial. The firm acts at each of these stages: replying to the proposed reassessment with the criminal risk in mind, assistance during interviews and police custody, challenging seizures, defence before the criminal court and the court of appeal, priority preliminary rulings on constitutionality and European remedies. It has handled several dozen criminal tax cases and has obtained, among other results, final acquittals on charges of tax fraud, VAT fraud and laundering the proceeds of tax fraud. Me Kadri publishes regularly in the leading legal journals and contributed to the drafting of Doctrine’s Encyclopédie fiscale on criminal tax law. Matters are handled in French and in English.
A tax criminal case does not begin in court: it begins during the tax audit. Since the Law of 23 October 2018, the tax authorities must report to the public prosecutor any reassessment involving more than 100,000 euros in tax where it carries the heaviest surcharges, without the Tax Offences Commission having to give an opinion (Article L. 228 of the Book of Tax Procedures, in the version in force until 31 December 2026, a recodification being under way). The taxpayer who disputes a reassessment is therefore, often without knowing it, disputing the documents of a future criminal case.
One feature governs these cases: what is written and stated during the audit is placed on the criminal file. Replies to the proposed reassessment, observations, and documents produced to obtain a settlement or a remission become statements that can be used against the taxpayer. The criminal defence is prepared during the administrative phase, not afterwards.
Me Mehdy Kadri has published in the Encyclopédie Doctrine on laundering the proceeds of tax fraud, on the material element of the offence of tax fraud and on proof of an executive’s deliberate failure.
Three routes lead a tax case to the criminal court. Mandatory reporting: the tax authorities must pass on to the prosecutor facts that have given rise, on more than 100,000 euros in tax, to a surcharge of 100% or 80%, or to a surcharge of 40% in the event of a repeat offence within the previous six years; the prosecution is then brought without any prior complaint. A complaint following the opinion of the Tax Offences Commission, for other facts. And the stand-alone offences: laundering the proceeds of tax fraud, VAT fraud, forgery and misuse of corporate assets fall outside these filters and may be prosecuted directly by the public prosecutor.
The threshold is assessed at the stage of the collection notice. A taxpayer who has spontaneously filed an amended return escapes mandatory reporting. These rules, which stem from the Law of 23 October 2018, appear in Article L. 228 of the Book of Tax Procedures until 31 December 2026; the ongoing recodification changes the article number without changing the mechanism.
The investigation is conducted with the assistance of the Financial Judicial Investigation Service (SEJF) and, for the most significant cases, under the authority of the National Financial Prosecutor’s Office. Searches and seizures take place early, on bank accounts and assets, and joint and several liability for payment of the evaded tax may be ordered against a convicted executive. The tax proceedings and the criminal proceedings run in parallel, on the same facts and the same documents: what is conceded in one reappears in the other, and the combination of the two penalties, accepted by the Constitutional Council subject to seriousness and a cap, is argued case by case.
Contributor to the Encyclopédie Doctrine in tax criminal law and regular author of case notes in its pages. References on the Press & Publications page.
No. Reporting to the prosecutor is mandatory above 100,000 euros in tax carrying the heaviest surcharges, or 40% in the event of a repeat offence. Below that, prosecution requires a complaint by the tax authorities following the opinion of the Tax Offences Commission. Money laundering and VAT fraud fall outside these filters.
Yes. Article 1741 of the General Tax Code states that the penalties apply independently of tax sanctions. The Constitutional Council has framed this combination: it is reserved for the most serious cases, and the total of the sanctions may not exceed the highest amount incurred.
Yes. It is a stand-alone offence, which the public prosecutor pursues directly, without a complaint from the tax authorities and without waiting for the fraud to be tried; it must however establish the elements of that fraud. Where it consists in concealing the origin of the funds, money laundering is a concealed offence and its limitation period runs only from its discovery, capped at twelve years.
It rules out the mandatory reporting under Article L. 228. It does not prevent a complaint following the opinion of the Tax Offences Commission, nor prosecution under the stand-alone offences.
Do not go alone, and prepare the interview with a lawyer before the date. A summons for a voluntary interview or police custody states the offence under investigation; it opens the right to be assisted by a lawyer and the right to remain silent. What is said to investigators joins a file that already contains the documents from the tax audit. The firm prepares the interview, attends it and requests access to the file as soon as the procedure allows.
Only the tax authorities, for tax fraud itself: by mandatory reporting to the public prosecutor above 100,000 euros in tax carrying the heaviest surcharges, or by a complaint following the binding opinion of the Tax Offences Commission. An individual, a partner or a competitor cannot trigger those proceedings. Laundering the proceeds of tax fraud and VAT fraud, on the other hand, can be prosecuted by the public prosecutor without the tax authorities.
The tax authorities’ complaint may be filed until the end of the sixth year following the year of the offence, and the period is suspended while the Tax Offences Commission examines the case, for up to six months. Laundering the proceeds of tax fraud follows a harsher rule: where it consists in concealing the origin of the funds, it is a concealed offence and the limitation period runs only from the day it is discovered, capped at twelve years after the facts.
The “verrou de Bercy” is the tax authorities’ monopoly over tax fraud prosecutions: no complaint, no trial. Since the Law of 23 October 2018 it has been lifted for the largest cases, which the authorities must report to the prosecutor, and kept for the others, which still require a complaint following the opinion of the Tax Offences Commission. The prosecutor also remains free to act for money laundering and VAT fraud.
Yes. Money laundering punishes whoever helps to justify the origin of funds derived from a fraud or assists in placing, concealing or converting them, even without being the perpetrator of the fraud. The prosecutor may pursue it without a complaint from the tax authorities and without the fraud having been tried; it must however establish that the funds came from tax fraud and that the person knew it.
Yes, for legal entities: since 2018 the prosecutor may offer a judicial public interest agreement (CJIP) to a company accused of tax fraud or of laundering its proceeds. It ends the proceedings against the company in exchange for a public interest fine and, where applicable, a compliance programme, without any finding of guilt. Executives remain personally liable to prosecution: the company’s agreement is negotiated with their defence in mind.
Tax fraud consists in evading tax that is due; VAT fraud (escroquerie à la TVA) consists in obtaining from the State a refund or credit of tax that is not due, through fraudulent manoeuvres, notably in so-called carousel schemes. The two offences may be charged together on the same facts. VAT fraud is prosecuted without a complaint from the tax authorities and, when committed by an organised group, often falls to the National Financial Prosecutor’s Office.
Yes: everything written and produced during the audit, replies to the proposed reassessment, observations, documents handed over to obtain a settlement, is placed on the criminal file if one is opened. The firm acts from the audit onwards so that the tax defence does not contradict the criminal defence to come, and to assess the value of a spontaneous amended return, which rules out mandatory reporting.
Yes. Any person finally convicted of tax fraud may be declared jointly liable, with the company, for payment of the evaded tax and the related penalties. That joint liability is not automatic: the criminal court decides whether or not to impose it, in light of each person’s role, and it is argued at trial.
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Email: mehdy@kadri-avocat.com
