Tag: CJIP

The French CJIP “convention judiciaire d’intérêt public”, was established by Article 22 of Law No. 2016-1691 of 9 December 2016 on transparency and fight against corruption. By Law No. 2018-898 of October 23, 2018 the law was extended to cover cases for tax evasion. Under Article 41-1-2 of the Code of Criminal Procedure the French Public Prosecutor may offer and negotiate CJIPs with companies facing a criminal investigation without the risks associated with a public and often lengthy process and trial. A CJIP can only be concluded for specific offences and must be “validated” by a judge during a public hearing. The judge will determine whether the company should be offered a CJIP by determining: (i) whether it is appropriate to enter into a settlement; (ii) whether all procedural rules have been followed during the negotiations between the company and the prosecutor; (iii) whether the fine imposed is lawful (as fines in France are capped at 30% of the annual turnover of a company over the past three years[6]); and (iv) the fine’s proportionality to the gains derived from the company’s wrongdoing. Companies have 10 days to reject the validation order of the CJIP. A criminal investigation and trial will follow if the judge rejects the CJIP or if the company uses its statutory right to reject the agreement.

Credit Suisse enters EUR 238 million settlement agreement in France

Credit Suisse enters EUR 238 million settlement agreement in France

/ CJIP, CREDIT SUISSE, Damages to the state, Disputes and Settlements, France, Illegal canvassing, Money laundering, Penalty/Fine, Settlement, Tax avoidance, Tax fraud, Tax schemes, Transfer Pricing News
A settlement agreement between the French Financial Public Prosecutor and Credit Suisse was announced in the Paris Court of Appeal 24 October 2022. The “CJIP” agreement brings an end to investigations in France over whether the Swiss bank facilitated and aided clients in tax avoidance. (English translation of the press release from the French Public Prosecutor) On 24 October 2022, the President of the Paris Judicial Court validated the judicial public interest agreement (CJIP) concluded on 21 October 2022 between the Financial Public Prosecutor (PRF) and CREDIT SUISSE AG pursuant to Article 41-1-2 of the Criminal Procedure Code. Under the terms of the CJIP, CREDIT SUISSE AG undertakes to pay the Treasury a public interest fine totaling EUR 123,000,000. In addition, CREDIT SUISSE AG undertakes to pay to the Treasury the sum of €115,000,000 in damages owed to the State. As a result, the public interest fine and the damages amount to the total sum of €238,000,000. Subject to the ... Read more
McDonald’s has agreed to pay €1.25bn to settle a dispute with French tax authorities over excessive royalty payments to Luxembourg

McDonald’s has agreed to pay €1.25bn to settle a dispute with French tax authorities over excessive royalty payments to Luxembourg

/ Aggravated tax fraud, Agreement at the outset, Arm's length principle, Centralisation of legal ownership of intangibles, CJIP, Court of Appeal, Disputes and Settlements, France, France, GAAR, Lack of substance, Legal ownership, Luxembourg, McDonald's, Retroactive change of pricing, Royalty, Royalty and License Payments, Royalty routing, Switzerland, Tax avoidance, Tax evasion, Tax fraud, Transfer Pricing News
On 16 June 2022 McDonald’s France entered into an settlement agreement according to which it will pay €1.245 billion in back taxes and fines to the French tax authorities. The settlement agreement resulted from investigations carried out by the French tax authorities in regards to abnormally high royalties transferred from McDonald’s France to McDonald’s Luxembourg following an intra group restructuring in 2009. McDonald’s France doubled its royalty payments from 5% to 10% of restaurant turnover, and instead of paying these royalties to McDonald’s HQ in the United States, going forward they paid them to a Swiss PE of a group company in Luxembourg, which was not taxable of the amounts. During the investigations it was discovered that McDonald’s royalty fees could vary substantially from one McDonald’s branch to the next without any justification other than tax savings for the group. This conclusion was further supported by statements of the managers of the various subsidiaries as well as documentation seized which ... Read more
France vs Google, September 2019, Court approval of CJIP Agreement - Google agrees to pay EUR 1 billion in fines and taxes to end Supreme Court Case

France vs Google, September 2019, Court approval of CJIP Agreement – Google agrees to pay EUR 1 billion in fines and taxes to end Supreme Court Case

/ CJIP, Digital Economy, Digital Economy, France, France, Google, Ireland, Limited Risk Distributors (LRD), Permanent establishment, Permanent Establishments, Permanent Establishments, Sales and Marketing Hubs, Sales and Marketing Hubs, Tax Avoidance Schemes, Tax Avoidance Schemes
The district court of Paris has approved a  “convention judiciaire d’intérêt public” negotiated between the French state and Google for an amount of € 500 million plus another agreement with the French tax authorities which amounts to 465 million euros. The agreement puts an end to the French lawsuits against Google for aggressive tax evasion, and litigation with the tax administration relating to adjustments for the periods going from 2005 to 2018. The CJIP “convention judiciaire d’intérêt public“, was established by Article 22 of Law No. 2016-1691 of 9 December 2016 in France on transparency and fight against corruption. By Law No. 2018-898 of October 23, 2018 the law was extended to cover cases for tax evasion. According to the CJIP legal actions can be ended in return for the payment of a fine. The dispute concerned the existence of a permanent establishment of Google Ireland in France. In Googles European headquarters in Ireland the corporate tax rate is (12.5%). However, ... Read more