La société d’avocats Damy
La Société d'avocats Damy à Nice assure une prestation de haut niveau, de la consultation d’un avocat à la représentation en justice. Les avocats du cabinet sont compétents en droit des affaires, des sociétés, droit immobilier, droit bancaire, droit social, droit des victimes et cas de dommages corporels. Membre de l’Association des avocats praticiens en droit social, Maître Grégory Damy dispose de certificats de spécialisation.
There is a fine line between tax evasion and tax fraud. This is something that the Luxembourg "ghost" company has understood well.
The daily Le Monde, following the OpenLux study, revealed that 38.5% of Luxembourg companies are financial holding companies. These companies may hold foreign companies.
These financial holding companies are mainly offshore companies with no real activity or employees. However, these simple "letterboxes" represent a gateway to the distribution of money from abroad.
Avoid taxes on dividends, avoid capital gains tax, lower income tax; there are many advantages to interpose a Luxembourg company between the French company and the tax authorities.
Today, this situation corresponds to the daily life of 15,000 French owners, an estimated value on only 50% of the companies declared in Luxembourg. These companies alone represent 4% of French GDP.
Nevertheless, this practice vacillates between legality and illegality, between tax optimisation strategy and abuse of tax law.
Article L64 of the Book of Fiscal Procedures (1) defines abuse of law as the act of diverting the intention of the original law in order to take advantage of it. We then speak of abuse of tax law for fraud against the law. Traditionally, in order for abuse of rights to be qualified, the objective of the arrangement must be exclusively fiscal in order to "evade or reduce the tax burden".
The European Union (5) has intervened to combat tax evasion practices that have a direct impact on the functioning of the internal market.
In fact, Openlux has made it possible to establish that more than 6,000 billion euros of financial assets were stored in Luxembourg in 2019 without any inking in the real economy.
Since 2020, article L64 A of the Book of Fiscal Procedures (2) provides for a broadened notion of abuse of rights. From now on, the "main", and no longer exclusive, reason for abuse of right must be "to avoid or reduce the tax burden".
Recently introduced, this anti-abuse provision hinders the current craze of companies for tax evasion.
Internet users can also consult the latest news on the impact of this law on the transmission of assets: http://gregorydamy.niceavocats.fr/nos-publications/actualites/actualite-en-droit-fiscal/la-nouvelle-definition-de-l-abus-de-droit-son-impact-sur-la-transmission-du-patrimoine
What are the consequences of abuse of rights for fraud against the law?
Articles 1729 (3) and 1741 (4) of the General Tax Code answer this question by adding tax and criminal sanctions. These include :
an increase in taxes due of 40 to 80% depending on whether or not the taxpayer has had the main initiative.
a fine of €37,500 and imprisonment for a maximum of five years if he voluntarily took part in the fraud.
Unfortunately, transparency with the Tax Authorities cannot reduce these sanctions since neither employees, offices nor economic objectives can be justified within the company.
The current scandal unfortunately threatens all Luxembourg companies with a French owner. The tax authorities will redouble their efforts to make their economic interests bear fruit. Police custody, emotional pressure, threats of sanctions may concern you.
Your lawyer, who is qualified in this area, will be able to defend you by arguing the legality of tax optimisation. Because yes, convictions for fraud are slim as long as you are properly supported in your proceedings.
Are you worried about your situation? Don't wait any longer. Contact our office. Maître DAMY Gregory, specialising in business law and company law, will be at your disposal to serve your best interests.