Artificial intelligence at the service of the French tax administration

According to the activity report of the DGFIP (Direction Générale des Finances Publiques – Public Finances Directorate General) for the year 2019, 12 billion was collected by the French State following tax audits.
intelligence-artificielle-administration-fiscale

This result, higher than what was initially expected, is partly due to the fact that the French tax administration has been modernising its IT tools for several years.

This modernisation is reflected in particular by a 40% increase in the budget for IT services, in 2019 it should be remembered that this budget amounted to around 199 million euros.

This increase in the IT services budget allows DGFIP to develop and test new types of tax audits using artificial intelligence and data mining.

First of all, what is artificial intelligence? Artificial intelligence, also called AI, is a set of techniques capable of reproducing certain human faculties such as logic, reasoning, etc.

Secondly, what is data mining? Data-mining is a kind of technique for analysing a large volume of information / data. This process makes it possible in particular to detect anomalies, as well as correlations within a very large amount of data.

Thanks to these new technologies (for which DGFIP also employed a certain number of data scientists, IT specialists, technicians, programmers, etc.), targeted tax audits could be implemented during the year 2019.

intelligence-artificielle-administration-fiscale-1

As indicated in the DGFIP report on its activity during the year 2019, the use of these technological tools made it possible to analyse the data held by DGFIP with those held by external organisations (resulting in particular from the automatic exchange of information – we would refer you to our following article on this: l’échange automatique d’information). This in-depth analysis made it possible to match up a great deal of data, and to observe certain inconsistencies or certain fraudulent behaviour.

Consequently, 22% of tax audits were scheduled using these technological tools in 2019. Thanks in particular to data mining, DGFIP was still able to collect 785 million euros.

An example of how these technological tools could be used:

Company A has been subject to a tax audit following an AAG (“acte anormal de gestion” – abnormal management action). The company has subsequently undergone a tax audit, this company is known to DGFIP, and its data is stored in the DGFIP files.

We then have a company B, with no apparent link with company A (different manager and shareholders) located in another geographical area (another region). This company, whose activity is different from company A, has the same telephone number as company A.

The software and programs of DGFIP will thus be able to link these 2 companies to each other thanks to these new technologies, and therefore, since company A has been subject to a tax audit, company B, having a link with the latter can also be monitored by DGFIP.

Furthermore, if a company C has no link with company A, but one of its managers is the same as in company B, DGFIP, having identified company B as having a link with company A, may also monitor company C in view of the fact that the latter has a “link” with company B (same manager).

The link between these companies can thus be made very quickly, which would not necessarily have been the case previously, especially if these companies have registered offices located in different departments or regions.

Thanks to these tools, DGFIP can monitor “so-called risk companies”, while carrying out fewer audits than before.

Obviously, tests were carried out beforehand, the Regional Directorate of Public Finance of Brittany having been chosen to experiment with AI. As can be seen on the official economie.gouv website (https://www.economie.gouv.fr/aife/lia-et-datascience-pour-meilleur-controle-des-depenses-letat#), this experimental pilot had been a success; indeed it should be noted that, with the use of these new tools, about “80% and more of anomalies had been detected, whereas with an audit (so-called classic audit) the figure was only 40%”.

The use of these new technical processes will therefore certainly be successful.

However, Artificial Intelligence and data-mining will not only be used to track down irregularities committed by taxpayers, but these tools should also help the State to control its spending.

Indeed, a decree was issued on 29 January 2019, creating an automated processing of predictive analysis relating to the control of State expenditure. This automated processing, which will bring together a large amount of data, should help public accountants to identify certain elements (e.g. payment at risk, expenses that may give rise to irregularities, etc.).

This automated processing should thereby help public accountants with their assignments, while participating in better budget management.

intelligence-artificielle-administration-fiscale-2

Obviously, these technological tools have also been developed to help companies in difficulty.

As mentioned in its 2019 activity report, DGFIP has set up a tool (based on AI) in order to target companies in difficulty. All kinds of difficulties can therefore be detected (as mentioned in this report, this could be a risk of insolvency proceedings, or a risk resulting from financing difficulties). By targeting companies that are in difficulty, or which could be so in the near future, the administrative authorities will be able to provide support to these companies, and may be able to save some of them.

How can we help?

Contact Maître Benjamin A. Kergueno, Attorney at Law today if you are dealing with issues related to real estate law in France and on the French Riviera.

Maître Benjamin A. Kergueno, LL.M will provide you with a full set of informations and with the adequate counsels for sorting it out.

For more information or to schedule an appointment with an experienced lawyer regarding real estate law in France, please contact us.

Lawyer-Nice-team

TÉMOIGNAGES

  • We cannot praise the services and the office of Benjamin Kerganueno highly enough.

    He turned around a painful set of circumstances into a very positive outcome in a short space of time.We are so glad he helped us and would highly recommend his services to both UK and French based Property owners.

    Gerard McCaffrey
    London UK
  • We highly recommened the sevices of Mtre Kergueno. We had a situation which was highly stressful to us and we found that his services were both highly professional and very reassuring. He was helpful, polite and to the point. We wouldn’t hesitate to recommend these services to any English speaking or Foreign Clients worried about the intricacies of French property law.

    Doyle
    France
  • I would like to thank Benjamin Kergueno, for his excellent service and very helpful advice. I was looking for an English speaking lawyer to advise me on French property law, both his knowledge of French law and his level of English were outstanding, and I would recommend his services to anyone looking for legal assistance in France.

    Simon
    France
  • Mtre Kergueno proved to be a true voice of reason and great judgement throughout a stressful time for me. At every point I felt confident in his knowledge, and his approach to matters was calm and professional. During a period when setting up a business in a foreign country can be daunting, Mtre Kergueno took much of the pressure away from me. I will continue to use Mtre Kergueno in the future.

    Kevin
    France
  • We would definitely recommend Benjamin to anyone needing legal assistance. We were in urgent need of a lawyer to assist us with documentation from our home country. Not only was Benjamin very quick to reply to our initial email enquiry but he was able to see us at short notice which was great as we had a very tight deadline to meet. Benjamin was incredibly helpful, and very patient with us (there were a lot of documents). His English is also fantastic and we wouldn’t hesitate to use him again should the need arise.

    Nicholas
    France

CONTACT US

Cannes Office - 22 bd Alexandre III 06400 Cannes 00.33.4.93.43.32.56
Nice Office - 28 rue Gioffredo 06000 Nice 00.33.4.93.13.33.66
 or fill the form below