In a decision issued on 13 September 2023, the French Supreme Court (Cour de cassation) reiterated the conditions governing the mandatory reporting by the tax authorities to the Public Prosecutor’s Office of facts likely to be regarded as tax fraud.
In this case, the manager of a company was charged with fraudulently evading the assessment and payment of corporation tax and VAT, as well as failing to make certain entries in the journal or inventory book.
The criminal court upheld the defence’s plea of nullity, pointing out that the tax assessment notice had not been produced, and ordered the cancellation of the investigation. On appeal, the Court held that, under the terms of Articles L. 228 of the French Tax Procedures Code and 111-5 of the French Criminal Code, failure by the tax authorities to append the tax assessment notice to its decision invalidated the prosecution.
The Criminal Division of the Court of Cassation overturned the appeal decision, considering that the failure to attach the tax assessment notice to the tax authorities’ decision did not invalidate the proceedings, and stated that the aforementioned texts did not require the notice to be attached. There is one point, however: judges must be able to ascertain, from the content of the documents in the case file, that the conditions relating to the amount of tax and the surcharges applied have been met at the recovery stage.