French tax authorities are using AI to clamp down on tax fraud

The French government is deploying increasingly aggressive methods to uncover tax fraud, according to a lawyer who specializes in private wealth.

“The administration has put in place systems that throw up information that is triggering more and more inquiries,” said Jerome Barre, a partner at Paris-based Yards, who noted that artificial intelligence is playing a role.

Barre was speaking at a presentation this week by the French Association of Family Offices, or AFFO, which represents the growing sector. France is home to some of the richest individuals and families in the world, including the clan behind Hermes International SCA and luxury titan Bernard Arnault, who founded couture-to-champagne conglomerate LVMH.

Barre said tax officials are focusing in particular on property valuations, which can also affect foreign owners of expensive estates in France. 

“The amount of information that authorities are seeking has multiplied, especially in some regions like Bordeaux,” he said. 

Statistics published earlier this month by the French government show detected tax fraud and resulting penalties to individuals and companies rose to €16.7 billion ($18.1 billion) in 2024, 10% more than the previous year and just over twice the level in 2020. 

Tax inspections have been helped by the use of data mining and artificial intelligence, the report said, as well as the creation of just under 800 jobs and a specialized intelligence unit for the most serious and complex cases.

The government’s increasing efforts to collect taxes comes as the country’s fiscal challenges intensify due to its deficit, political instability and pledges to spend more on defense.

“Fraud is no longer just about isolated cheaters, it has grown into a veritable criminal industry,” Budget Minister Amelie de Montchalin said in the report, which also covered fraud in state subsidies, social security and trade.