French authorities use artificial intelligence to fight tax fraud

The French government is implementing increasingly rigorous strategies to identify tax fraud, as stated by a lawyer who specializes in private wealth.

“The administration has established systems that generate information leading to an escalating number of inquiries,” remarked Jerome Barre, a partner at Yards in Paris, highlighting the role of artificial intelligence in this process.

Barre made these comments during a presentation this week organized by the French Association of Family Offices (AFFO), which represents this expanding industry. France boasts some of the wealthiest individuals and families globally, including the family behind Hermes International SCA and luxury magnate Bernard Arnault, founder of the couture-to-champagne conglomerate LVMH.

He noted that tax officials are particularly concentrating on property valuations, which also have implications for foreign owners of high-value estates in France.

“The volume of information sought by the authorities has surged, especially in certain regions like Bordeaux,” he stated.

Recent statistics published by the French government indicate that detected tax fraud and the penalties imposed on individuals and companies reached €16.7 billion ($18.1 billion) in 2024, a 10% increase from the previous year and more than double the rate observed in 2020.

Tax inspections have been bolstered by the application of data mining and artificial intelligence, as well as the establishment of nearly 800 new positions and a specialized intelligence unit to handle the most severe and complex cases.

The government’s heightened focus on tax collection comes amid growing fiscal challenges, exacerbated by the nation’s deficit, political instability, and commitments to increase defense spending.

“Fraud is no longer simply the act of isolated individuals; it has evolved into a significant criminal industry,” asserted Budget Minister Amelie de Montchalin in the report, which also addressed fraud related to state subsidies, social security, and trade.

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