Finally A Glorious Growth Industry In France: Hounding Companies For Back Taxes And Penalties [Testosteronepit]

For some companies—those that know how to leverage worldwide tax systems—France offers a free ride. But as the French government chases down the last euro in a vain effort to make ends meet, it’s not only going after multinationals and their tax optimization schemes but also smaller companies that, already taxed half to death, are gasping for air.

It didn’t help that Budget Minister Jérôme Cahuzac, an integral part of France’s high-tax strategy to whittle down its budget deficit, is suddenly under official investigation for “tax fraud laundering.” The crime, worse than plain-vanilla tax fraud, has two steps: committing tax fraud and acquiring with this money assets that can be sold legally. If it can be proven that he laundered his tax fraud habitually, he faces up to seven years in the hoosegow and up to €1 million in fines.

But even for corporate welfare queens, it’s getting complicated. Raids on internet companies have become media fodder. Microsoft, Yahoo, Amazon, and eBay were all raided, some with a very photogenic display of force. Google got tangled up when tax authorities raided Groupe Partouche’s online gambling operations and found invoices from Google. Not much later, they raided Google’s offices in Paris, suspecting it of selling online ads to French companies but declaring revenues from those transactions in low-tax Ireland instead of France.

“I am very proud of the structure that we set up,” explained Google Chairman Eric Schmidt when it became known that Google might have to pay €1.7 billion in back taxes and penalties. “We did it based on the incentives that the governments offered us to operate,” he added. “It’s called capitalism.”

“These optimization schemes are expanding from large companies to smaller ones,” Alexandre Gardette told the French paper, Les Echos. He’s the director of tax audits at the DVNI, the Finance Ministry’s Directorate of National and International Audits, responsible for auditing the 3,500 largest French companies.

Tax revenues have become such a priority that the Finance Ministry’s Directorate General of Public Finances (DGFiP) has a growth target for back taxes and penalties in its three-year plan: haul in €1 billion more in 2013.

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Sarkozy to Start Private Equity Fund Backed by Qatar? [cnbc]

Nicolas Sarkozy is being wooed by sovereign wealth funds including Qatar’s who are ready to back him to start a private equity fund.

Qatar’s sovereign wealth fund and other investors have offered to commit as much as €500m in total to a fund run by the former French president, people familiar with the matter said. Mr Sarkozy has sought advice from close advisers on the plan.

However, he has put it on hold in recent weeks because he sees an opportunity to return to politics following the rapid decline in the polls of President Franois Hollande, who defeated him in May, two people familiar with Mr Sarkozy’s thinking said. “The Qataris are taking an option on the next president of France,” a third person with knowledge of the venture said.

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French consumer recession is likely driven by job losses [SoberLook]

Recent retail numbers from France are showing an ongoing consumer recession in spite of signs of improvement in confidence elsewhere in the EU. In fact the EU economic sentiment numbers today beat expectations to the upside –  nothing to write home about, but there are signs of stabilization (for now). French Retail PMI on the other hand shows highly stressed consumers generating the sharpest fall in retail sales in six months. French retail PMI materially dragged down the Eurozone’s overall PMI.

Markit: – The French retail sector was caught in a deepening downturn during February. Sales fell sharply on both a monthly and annual basis, while there was a survey-record shortfall versus previously set plans. Retailers’ gross margins continued to be squeezed by a combination of higher purchasing costs and strong competitive pressures.

 

 

 

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France calls on UN help for Mali peace [heraldsun]

FRANCE has called on the UN Security Council to send peacekeepers to Mali to take over from French forces battling al-Qaeda linked guerillas and speed up the deployment of human rights observers.

French troops patrol along the Niger river

 

It will take “several weeks,” however, before an assessment can be made on when French troops can hand over to peacekeepers, French ambassador Gerard Araud said after closed UN Security Council talks on the Mali crisis.

“France, for the first time at the Security Council, raised the perspective of the creation of a peacekeeping operation when security conditions permit it,” he told reporters.

France has said it will start reducing its 4000 military force in Mali in March and said it would take several weeks to complete planning for a UN force and to pass a Security Council resolution setting it up.

In Paris, French Foreign Minister Laurent Fabius said France aimed to have the UN force in place in Mali by April.

The force would support the stabilisation of Mali after the French-Malian offensive and “help Malians to refound their country” with a “national pact” to end longstanding rivalry between the government and ethnic Tuaregs and Arabs.

 

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The interests behind France’s intervention in Mali [dw]

French soldiers walk past a hangar in Mali<br />
REUTERS/Joe Penney ” src=”<a href=http://www.dw.de/image/0,,16521420_401,00.jpg” width=”700″ height=”394″ border=”0″ />

ARMED CONFLICT

The interests behind France’s intervention in Mali

France has intervened in Mali in an effort to stop the advance of Islamist rebels – at the request of the government in Bamako and with the UN’s blessing. But critics accuse Paris of pursuing a neo-colonialist agenda.

It’s unclear how long France’s military campaign in Mali will last, since preventing radical Islamists from taking control of the country requires stabilizing the region for the long term. The Society for Threatened Peoples (STP), a Göttingen-based NGO, has called on France to present a realistic plan for achieving its goals.

“After all, the Islamists will use their old strategy and pull back quickly in order to regroup with the protection of mountains and caves,” explained STP spokesperson Ulrich Delius.

Officially, President Francois Hollande’s government says that security interests explain its decision to intervene, and Paris insists it wants to act early to prevent the rebels in Western Africa from becoming a danger to Europe.

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Analysis: France digs in for long, uncertain stay in Mali [Reuters]

(Reuters) – In five days, France’s mercy dash to Mali to stop al Qaeda-linked Islamists seizing the capital has bounced it into a promise to keep troops there until its West African former colony is finally back on its feet.

Exactly how long that will take is hard to say. But Africa’s latest war is likely to entail a long stay for France with an exit strategy that will depend largely on allies who have yet to prove they are ready for the fight.

“We should get used to the idea we are embarking on a major mission alongside Malian and African forces for the duration,” Defense Minister Jean-Yves Le Drian said late on Tuesday.

The outcome could seal France’s role in Africa for decades. At best, it is a chance to rescue a country destabilized by arms flooding in from the 2011 war in nearby Libya which France, under ex-president Nicolas Sarkozy, helped to promote.

But if it goes wrong, it could burden France with accusations of neo-colonialism on a continent which it wants as a trading partner to boost its own flagging economic vitality.

 

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French judges open new ‘Karachi’ probe against Sarkozy []

Former French President Nicolas Sarkozy.—AP (File Photo)

PARIS: French judges on Thursday authorised a fresh probe against ex-president Nicolas Sarkozy as part of the so-called “Karachi affair,” a judicial source told AFP, in the latest legal headache faced by the former leader.

Three judges decided to proceed with a probe to see whether Sarkozy violated a confidentiality law when the Elysee presidential palace published a press release on the affair in September 2011.

The press release said that Sarkozy’s name did not figure in any of the files on the so-called Karachi affair, which stems from a 2002 bombing in the Pakistani city that killed 11 French engineers.

The engineers’ families sued Sarkozy over the press release, charging that it violated laws that prohibit publication of information about ongoing investigations.

Although prosecution argued that Sarkozy cannot be investigated because he had presidential immunity at the time, the judges disagreed.

“The act of permitting the release of information concerning ongoing investigations does not enter into the functions of the president,” the three investigating judges said in their ruling.

The 2002 Karachi bombing case has spawned several other investigations implicating Sarkozy, a right-winger who was defeated in his re-election bid last year by Socialist Francois Hollande.

 

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