Tax Fraud and Money Laundering: French Criminal Defense

Defending International Clients in French Tax Fraud and Money Laundering Investigations

Our firm has been assisting companies, their executives, and individuals in international and French tax law, and in business and tax criminal law, for more than thirty years. We act in tax fraud, money laundering of tax fraud proceeds, transfer pricing disputes, and cross-border structuring matters, both in France and abroad.

Our attorneys handle all aspects of international tax law together with business criminal law, including tax fraud, money laundering of tax fraud proceeds, misuse of corporate assets, and undeclared work. We regularly act in emergency proceedings: dawn raids, tax investigations, the right of visit and seizure, tax searches, custody, and voluntary interviews.

Tax Fraud Under French Law

Tax fraud is defined and punished by Article 1741 of the French General Tax Code (Code général des impôts). The basic penalty is a fine of €500,000 and five years' imprisonment. Where the offense is committed by an organized group, the penalty rises to €3,000,000 and seven years' imprisonment.

French tax fraud proceedings frequently start with a tax audit rather than a criminal complaint. Whether a case is referred to the public prosecutor now depends on statutory thresholds rather than on the tax authority's own discretion, following the 2018 reform of the so-called “verrou de Bercy” rule that previously gave the tax administration sole control over criminal referrals.

Money Laundering of Tax Fraud Proceeds

Money laundering of tax fraud proceeds is a separate offense under Article 324-1 of the French Criminal Code. It does not depend on a prior conviction for tax fraud, and the referral thresholds that apply to tax fraud itself do not apply to it. This is the single most important point for foreign clients to understand: a case can proceed as money laundering even where the underlying tax matter has not been, or cannot be, prosecuted as fraud.

The offense targets the concealment or conversion of funds known to originate from tax fraud: routing proceeds through a foreign company, converting them into other assets, or simply holding an undeclared foreign account funded by unreported income can each be treated as laundering, independently of the fraud itself.

Misuse of Corporate Assets and Undeclared Work

Misuse of corporate assets (abus de biens sociaux) is punished under Article L. 241-3 of the French Commercial Code for limited liability companies (SARL) and Article L. 242-6 for joint-stock companies (SA, SAS). The penalty is five years' imprisonment and a €375,000 fine. The offense requires a use of company assets contrary to the company's interest, a personal benefit to the director, and bad faith.

Undeclared work (travail dissimulé), governed by the French Labour Code, frequently accompanies international structuring: staff formally employed by a foreign entity but actually working under French direction is one of the most common grounds for reassessment we see in cross-border groups.

What Changed With the Law of 25 June 2026

Law No. 2026-534 of 25 June 2026, on combating social and tax fraud, introduced an aggravating circumstance of organized group for tax fraud, extended pre-trial custody to up to 96 hours in such cases, and allows a statute of limitations of up to 30 years. It also created Article 706-1-3 of the French Code of Criminal Procedure, which authorizes the transmission of information between judicial police officers and the tax and social administrations, subject to authorization by the public prosecutor or the investigating judge.

These measures apply directly to organized tax fraud and to money laundering built on it. Companies and executives with cross-border structures should treat this as a material change in exposure, not a technical adjustment.

Emergency Criminal Proceedings: Dawn Raids and Custody

Two distinct procedures typically open these cases. A tax search, under Article L. 16 B of the Book of Tax Procedures, allows the tax authority to seize documents at a home or business address, on prior authorization from the liberties and custody judge, before any criminal investigation has formally opened. Custody, governed by the Code of Criminal Procedure, places the individual under constraint, with a right to legal assistance from the first hour.

We intervene from the moment a raid or a custody notice occurs, through to trial before the correctional court and, where necessary, the court of appeal, on both procedural grounds and the merits of the case.

How We Assist International Clients

• Intervention in all types of tax investigations, from the first audit notice to a criminal referral.

• Immediate assistance in crisis situations: dawn raids, tax searches, and other coercive measures, including challenging their legality.

• Representation before the investigating judge, the correctional court, and the court of appeal.

• Dedicated advice on money laundering proceedings, distinct from the underlying tax matter.

• Preventive audits identifying exposure before a control reveals it.

This allows us to put protective measures in place and, where necessary, to attend custody hearings and other proceedings without delay.

Our long-standing practice in business taxation and criminal law has built a solid reputation, reflected in the regular media appearances of Me Mabrouk Sassi in leading French outlets. See our press coverage.

Our clients are companies and individuals located throughout France, including its overseas territories, and abroad, notably in the European Union, the United States, the Gulf, the Middle East, North Africa and Asia.

Frequently Asked Questions

I am not a French tax resident. Can I still be prosecuted for tax fraud in France?

Yes, if the fraud concerns tax due in France, or if a French company or French-source income is involved, regardless of where you live.

What is the difference between tax fraud and money laundering of tax fraud proceeds?

Tax fraud is the underlying act of evading tax. Money laundering is a separate offense concerning what is done with the proceeds afterwards, and it can be prosecuted independently.

How quickly do I need a lawyer after a dawn raid or a custody notice?

Immediately. You have a right to legal assistance from the first hour of custody, and the decisions made in the first hours of a search or a raid often determine the rest of the case.

Does the 2026 law affect foreign companies operating in France?

Yes. The aggravating circumstance of organized group and the extended custody period apply regardless of the nationality of the company or its executives, as soon as French tax fraud is at stake.

Can I resolve a tax fraud matter without going to trial?

In some cases, yes, through negotiated settlement procedures. Whether this is available depends on the stage the case has reached and the facts involved; we assess this at the first meeting.

Tax Fraud and Money Laundering: French Criminal Defense

Defending International Clients in French Tax Fraud and Money Laundering Investigations

Tax Fraud Under French Law

Money Laundering of Tax Fraud Proceeds

Misuse of Corporate Assets and Undeclared Work

What Changed With the Law of 25 June 2026

Emergency Criminal Proceedings: Dawn Raids and Custody

How We Assist International Clients

Frequently Asked Questions

Further Reading

French Wealth Tax (IFI)

Tax Audits & Compliance

International Taxation / Transfer Pricing

Investment & Real Estate