Seizure of 65.2 million euros in the investigation into McKinsey for tax fraud

New twist in the affair surrounding the American consulting firm McKinsey. This Friday, the National Financial Prosecutor's Office (PNF) announced, in conjunction with the Brussels prosecutor's office, that it had seized "a total sum of 65,244,757.07 euros" on August 19. And this, in order to repair a “tax damage”.

As a reminder, an investigation was opened in 2022, after the publication of a Senate report on the growing use of private consulting firms by the State and their “influence on public policies”. Since then, searches have been carried out, and interviews of witnesses and suspects have taken place. Following this work, the PNF “sought the assistance of the Brussels public prosecutor’s office, as part of international legal assistance,” explains the institution in a press release. This mutual assistance, welcomed by the prosecution, enabled this seizure, which corresponds to “96% of the tax loss according to the assessment of the National Financial Prosecutor’s Office”. Enough to estimate the total damage at 68 million euros. The seized sum “serves to secure any possible financial penalties that could ultimately be pronounced by the court,” the PNF also specifies in Le Figaro.

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“The precautionary seizure measure is a procedural measure linked to a preliminary investigation carried out by the French authorities. It does not constitute a court decision,” responded McKinsey when questioned by AFP. “We continue to cooperate with the French authorities and dispute any wrongdoing on our part. We reaffirm our commitment to respecting our tax obligations in France and in each of the countries where we carry out our activities,” added the group.

“Transfer pricing” singled out by the Senate

In 2022, the Senate report notably accused McKinsey, an American consulting giant, of demonstrating “tax optimization” in France. “The McKinsey firm is subject to corporate tax (IS) in France but its payments have been zero euros for at least 10 years,” wrote the senators, denouncing a “caricatural example of tax optimization.” The report pointed to the payment of “transfer prices” from the firm's French entities to the parent company, based in Delaware, in the United States. A way to “compensate for shared expenses within the group” and to reduce the company’s tax results, and therefore their corporate tax.

The PNF's preliminary investigation had been opened for aggravated money laundering of tax fraud: it targeted “well and only the company McKinsey on the question of its tax status in France”, specified the PNF in Le Figaro. The firm, for its part, assured to respect “the French tax and social rules which apply to it”, and insisted that its French tax approach is “similar in the countries where it is present and constant for years”.

Also read How the consulting firm McKinsey allegedly escaped corporate tax in France

For its part, the PNF recalls above all that despite this seizure, “the preliminary investigation continues”, without today’s announcement prejudging the imminent end of its work. “This investigation is also an opportunity to recall that when it comes to the seizure and confiscation of criminal assets, a comprehensive judicial strategy is required from the detection and freezing of assets,” concludes the institution.