The accusations of the senators are based on the checks “on documents and on the spot” which they carried out, in particular at the Ministry of Economy and Finance.
A Senate commission of inquiry on Thursday accused the French entities of the McKinsey firm of tax optimization, such that they would not have paid any corporate tax between 2011 and 2020.The McKinsey firm is subject to corporation tax (IS) in France but its payments have been zero euros for at least 10 years“, denounces the Commission of Inquiry into the influence of consulting firms on public policy.
Read also“McKinsey never enters the field of political decision-making”
However “its turnover on national territory reached 329 million euros in 2020, of which approximately 5% in the public sector” and “it employs around 600 people” in France, insist the senators in a document sent to AFP. “It seems to be a caricatural example of tax optimization”judges the commission of inquiry.
Its mechanism would be as follows: “the French entities of McKinsey pay ”transfer prices” to the parent company”based in Delaware (United States), to offset shared expenses within the group. “However, these “transfer prices” (…) constitute a burden for companies, which leads to a reduction in their tax result and, consequently, the amount of their taxation”, accuse the senators. In the case of McKinsey, the amount of the transfer prices would be such that it would participate “to make the tax result in France zero or negative, for at least 10 years”. For the tax authorities, the challenge is therefore to verify that McKinsey has assessed them “at fair value”concludes the commission of inquiry.
The accusations of the senators are based on the checks “on parts and on site” they have carried out, in particular at the Ministry of Economy and Finance. The documents they examined relate to the period 2011-2020 and concern “the two main McKinsey entities registered in France: McKinsey & Company Inc. France and McKinsey & Company SAS”.
“The prosecutor will be seized”
This information is published two months after the hearing by the commission of the head of the public sector division of McKinsey, Karim Tadjeddine. “I say it very clearly: we pay corporate tax in France”he then assured. “The statements of Mr. Karim Tadjeddine (…) are likely to constitute false testimony before a commission of inquiry”, senators warned Thursday. Consequently, “the public prosecutor will be seized. It will be up to the prosecution to continue the investigations.indicated at a press conference the rapporteur of the commission, Senator Eliane Assassi (CRCE group with a communist majority).
Reacting to these accusations, McKinsey assured Thursday evening in a press release to respect “all applicable French tax and social rules” and said to have paid corporation tax “the years when the firm made a profit in France”. “When it comes to transfer pricing, McKinsey has an approach which is not specific to France and which applies to the different countries where it is present”says the company again. “This approach is known to the French tax administration”, adds the group. Apart from the case of the firm, “there are no other (judicial) steps relating to possible false testimony” as part of the hearings conducted by the commission, said the chairman of the commission, Senator LR Arnaud Bazin, on Thursday.
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