{"id":1353,"date":"2021-02-01T10:57:42","date_gmt":"2021-02-01T10:57:42","guid":{"rendered":"https:\/\/gregorydamy.niceavocats.fr\/?p=1353"},"modified":"2023-08-26T11:33:19","modified_gmt":"2023-08-26T11:33:19","slug":"tax-evasion-vs-tax-avoidance-2","status":"publish","type":"post","link":"https:\/\/gregorydamy.niceavocats.fr\/en\/tax-evasion-vs-tax-avoidance-2\/","title":{"rendered":"Tax Evasion vs Tax Avoidance"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; custom_margin=&#8221;||0px||false|false&#8221; custom_padding=&#8221;||0px||false|false&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_row column_structure=&#8221;1_3,1_3,1_3&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; background_enable_mask_style=&#8221;on&#8221; background_mask_style=&#8221;wave&#8221; background_mask_color=&#8221;rgba(0,0,0,0.08)&#8221; custom_padding=&#8221;0px||6px|||&#8221; locked=&#8221;off&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;1_3&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_column][et_pb_column type=&#8221;1_3&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_column][et_pb_column type=&#8221;1_3&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_circle_counter title=&#8221;Estimated reading time (in minutes)&#8221; number=&#8221;3&#8243; percent_sign=&#8221;off&#8221; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; title_font=&#8221;Amiri||||||||&#8221; max_width=&#8221;137px&#8221; custom_margin=&#8221;20px|auto|30px|auto|false|false&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_circle_counter][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; custom_margin=&#8221;||0px||false|false&#8221; custom_padding=&#8221;||0px||false|false&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_divider _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_image src=&#8221;https:\/\/gregorydamy.niceavocats.fr\/wp-content\/uploads\/2023\/05\/business-background-design-scaled.jpg&#8221; title_text=&#8221;Tax Businessmen&#8221; _builder_version=&#8221;4.21.0&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; global_colors_info=&#8221;{}&#8221; sticky_enabled=&#8221;0&#8243;][\/et_pb_image][et_pb_text _builder_version=&#8221;4.21.0&#8243; _module_preset=&#8221;default&#8221; text_font=&#8221;Amiri||||||||&#8221; header_2_font=&#8221;Amiri||||||||&#8221; hover_enabled=&#8221;0&#8243; global_colors_info=&#8221;{}&#8221; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p><a href=\"https:\/\/www.economie.gouv.fr\/node\/33893\"><span>Tax Evasion<\/span><\/a><span>\u00a0vs Tax Avoidance The distinction between tax evasion and tax avoidance can often blur, but it&#8217;s a line that the so-called &#8216;ghost&#8217; company in Luxembourg has shrewdly grasped.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span>There is a fine line between tax evasion and tax avoidance.\u00a0<\/span><span>The Luxembourg \u201cghost\u201d company has understood this well.<\/span><\/h2>\n<p><span>The daily Le Monde, following the OpenLux study, reveals that 38.5% of Luxembourg companies are financial holding companies.\u00a0These companies can hold foreign companies.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>These financial holding companies are mostly offshore companies with no real activity or employees.\u00a0These simple \u201cmailboxes\u201d nevertheless represent a portal to the distribution of money from abroad.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Avoid dividend taxes, evade capital gains tax, reduce income tax;\u00a0Interposing a Luxembourg company between the French company and the tax authorities has many advantages.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Today, this situation corresponds to the daily life of 15,000 French owners, i.e. an estimated value of only 50% of companies declared in Luxembourg.\u00a0These companies alone represent 4% of French GDP.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>However, this practice oscillates between legality and illegality, between optimization strategy and abuse of tax law.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Article L64 of the Book of Tax Procedures (1) defines abuse of rights as the fact of diverting the intention of the original law in order to profit from it.\u00a0We then speak of abuse of tax law for evasion of the law.\u00a0Traditionally, for the abuse of rights to be qualified, the objective of the device must be exclusively fiscal in order \u201cto evade or attenuate fiscal charges\u201d.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>The European Union (5) has intervened to combat tax avoidance practices which have a direct impact on the functioning of the internal market.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Indeed, Openlux has made it possible to establish that more than 6,000 billion euros of financial assets were stored, in 2019, in Luxembourg without anchoring in the real economy.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Since 2020, article L64 A of the book of tax procedures (2) provides for a broader concept of abuse of rights.\u00a0From now on, the abuse of rights must have as its \u201cmain\u201d and no longer exclusive reason, \u201cthat of evading or reducing the tax burden\u201d.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Recently introduced, this anti-abuse provision counters the current craze for corporate tax evasion.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Internet users can also consult the news on the impact of this law on the transfer of assets: http:\/\/gregorydamy.niceavocats.fr\/nos-publications\/actualites\/actualite-en-droit-fiscal\/la-nouvelle-definition -of-the-abuse-of-rights-its-impact-on-heritage-transmission<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span>What are the consequences of abuse of rights for breaking the law?<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span>Articles 1729 (3) and 1741 (4) of the General Tax Code answer this question by adding tax penalties and criminal penalties.\u00a0We count :<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>an increase in taxes due from 40 to 80% depending on whether or not the taxpayer has the main initiative.<\/span><\/p>\n<p><span>the attribution of a fine of \u20ac37,500 and imprisonment for a maximum of five years if he voluntarily participated in the fraud.<\/span><\/p>\n<p><span>Unfortunately, transparency with the tax authorities cannot mitigate these sanctions since neither employee, nor mandate, nor economic objective can be justified within the company.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>The current scandal unfortunately threatens all Luxembourg companies with French ownership.\u00a0The tax administration will redouble its efforts to promote its economic interests.\u00a0Police custody, emotional pressures, threats of sanctions can affect you.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Your lawyer, qualified in the matter, will be able to defend you by pleading on the legality of the tax optimization.\u00a0Because yes, convictions for fraud are slim when you are well supported in your steps.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>Does your situation worry you?\u00a0Do not wait any longer.\u00a0Contact our study.\u00a0<\/span><a href=\"https:\/\/gregorydamy.niceavocats.fr\/notre-equipe\/\"><span>Master DAMY Gregory<\/span><\/a><span>\u00a0, specialized in business law and company law, will be at your disposal to best serve your interests.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>1\/Article L64 of the Book of Tax Procedures: https:\/\/www.legifrance.gouv.fr\/codes\/article_lc\/LEGIARTI000037993642\/<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>2\/ Article L64A of the Book of Tax Procedures: https:\/\/www.legifrance.gouv.fr\/codes\/article_lc\/LEGIARTI000037993642\/<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>3\/Article 1729 of the General Tax Code: https:\/\/www.legifrance.gouv.fr\/codes\/article_lc\/LEGIARTI000020051904\/<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>4\/Article 1741 of the General Tax Code: https:\/\/www.legifrance.gouv.fr\/codes\/article_lc\/LEGIARTI000037526294\/<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>5\/Council Directive (EU) 2016\/1164 of 12 July laying down rules to combat tax avoidance practices which have a direct impact on the functioning of the internal market: https:\/\/eur-lex.europa.eu\/ legal-content\/ FR\/TXT\/HTML\/?uri=CELEX:32016L1164&amp;qid=1554885315139&amp;from=FR _<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span>6\/ Le Monde video clip: what the OpenLux operation reveals: https:\/\/www.lemonde.fr\/videos\/video\/2021\/02\/08\/le-luxembourg-un-coffre-fort-fiscal-au-c -ur-de-l-europe_6069141_1669088.html<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; custom_margin=&#8221;||0px||false|false&#8221; custom_padding=&#8221;||0px||false|false&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_divider _builder_version=&#8221;4.19.5&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_divider][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tax Evasion\u00a0vs Tax Avoidance The distinction between tax evasion and tax avoidance can often blur, but it&#8217;s a line that the so-called &#8216;ghost&#8217; company in Luxembourg has shrewdly grasped. &nbsp; There is a fine line between tax evasion and tax avoidance.\u00a0The Luxembourg \u201cghost\u201d company has understood this well. The daily Le Monde, following the OpenLux [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[297],"tags":[],"class_list":["post-1353","post","type-post","status-publish","format-standard","hentry","category-competition-consumer-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Tax Evasion vs Tax Avoidance - Soci\u00e9t\u00e9 d&#039;avocats Damy<\/title>\n<meta name=\"description\" content=\"Tax Evasion vs Tax Avoidance Tax Evasion vs Tax Avoidance The distinction between tax evasion and tax avoidance can often\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gregorydamy.niceavocats.fr\/en\/tax-evasion-vs-tax-avoidance-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Evasion vs Tax Avoidance - 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