2023: A Year of Increased Tax Vigilance

The French tax authority conducted nearly one million document-based income tax audits in 2023, a 37% increase from the previous year. This increase is partly due to the rise in tax credit fraud. According to a report published by the Directorate General of Public Finance (DGFIP), the tax audits conducted in 2023 resulted in the recovery of 10.6 billion euros.
 

Improvements to the tools available to the tax administration have contributed to this increase in the number of audits. In fact, more than half of the tax audits (56%) were recommended by artificial intelligence last year. However, the DGFIP has also observed an increase in attempts at income tax fraud, particularly fraud related to tax credits and deductions.
 

DGFIP agents have successfully thwarted certain fraud attempts as early as the tax return filing stage. In 2023, this is estimated to have prevented 182 million euros in improper payments and tax credits. However, it is important to remember that claiming nonexistent or erroneous expenses to obtain a tax credit can result in criminal prosecution for fraud or making false statements.
 

The 2024 Finance Act established a crime of incitement to tax evasion to punish those who post advice and tools online for evading taxes. The new anti-fraud plan also calls for a 25% increase in the number of tax audits of individuals—particularly high-net-worth taxpayers—by 2027.
 

In short, the French tax authorities are stepping up their document-based income tax audits, notably by using artificial intelligence to detect fraud. Taxpayers are urged to be vigilant and to comply with their tax obligations, or face criminal penalties.