Very large companies, well established in France, pay almost no taxes. How is this magic trick possible? By tax optimization! Good Finance unveils the tips and tricks of these wizards.
Tax optimization, what is it?
Very concretely, to optimize the tax system, it means using different legal processes to circumvent the legislation in order to pay less taxes.
Several techniques exist:
A head office abroad : it’s not a secret! Some countries, such as Luxembourg, offer more favorable tax conditions than France. Companies therefore choose to install their head office, even if their activity is not or little developed in this country. This allows them to benefit in part or in full from the proposed tax system.
Some companies have their profits transferred
The mechanism of the “Dutch sandwich” : Some companies have their profits transferred to Holland, to a shell society that sends the funds directly to Bermuda or any other non-European tax haven. This is the mechanism called Dutch sandwich.
Deficit indefinitely reportable : it is a simple process. If you have deficits in one country, even if the parent company based in another country is largely profitable, then you can be exempt from paying taxes.
Which companies are concerned?
The champion of this practice was sentenced last March: Amazon. The French tax claimed him 200 million in profits earned in France between 2006 and 2010. The company had declared only 100 million profit while the US giant had made 889 million.
But other companies are also concerned: the chain of cafes Starbucks (69 cafes in France) has never paid tax while it has been present in France for eight years. Same thing for KFC restaurants, established for 10 years.
The French tax authorities would also be interested in Facebook and Apple companies. If their destiny was similar to that of Google, the French tax would find something to fill his coffers …