As more and more French people post their daily lives on social networks, the French tax authorities have just received the go-ahead for a three-year experiment to collect and use taxpayers' personal data on these sites, as well as on online platforms. A text issued by the government in mid-February details the terms of application of this new measure, designed to identify potential tax evaders.
What data will the tax authorities use?
A decree issued on February 11 launched a three-year experiment authorizing tax authorities to use taxpayers' personal data on social networks and collaborative platforms. This scheme, provided for in the Finance Act for 2020 and reviewed by the Commission nationale de l'informatique et des libertés (CNIL), should enable the tax authorities to step up controls.
The decree specifies the types of data that can be used by the tax authorities. This concerns data opened on online platforms or social networks, solely in the context of concealed activity or false domiciliation abroad. As a reminder, a concealed activity corresponds to an undeclared commercial activity. For example, individuals may sell a large number of goods on sites such as Leboncoin or Ebay without declaring them. As soon as this operation is repeated to the point of becoming unusual, the tax authorities will consider it to be an occult activity. Secondly, false domiciliation abroad involves taxpayers pretending that they no longer have any tax links with France, when in fact they do. Faced with the scale of this phenomenon, the French government has stepped up its controls, and the number of reassessments has risen sharply in recent years.
The collection of taxpayers' personal data on certain websites will therefore enable the tax authorities to better prove these two offenses.
How is this information used?
Data collection, use and storage are strictly regulated by the implementing decree. The decree stipulates that only content that relates to the person targeted by the administration's investigation, and whose access does not require a password or registration on the site concerned, may be used. In other words, the tax authorities can only use data published publicly by the taxpayer and not by third parties.
If the information obtained under the decree does not enable us to prove that an offence has been committed, it must be deleted after 30 days. Otherwise, the maximum data retention period is set at 1 year, or for the duration of the criminal or tax proceedings.
While the CNIL has acknowledged the legitimacy of the objectives pursued by this system, noting nevertheless its "unprecedented" nature, lawyers fear possible errors in the algorithm developed by the Ministry of the Economy to automatically collect and analyze data published by taxpayers, and intrusions into private life.