How to adapt to the automation of tax audits by the administration by 2022?

The development of Artificial Intelligence

Data analysis in the programming of tax audits is an increasingly important topic for the General Directorate of Public Finances (DGFiP). To target fraud, it now relies on two analysis techniques: artificial intelligence (AI) and data-mining. These techniques, based on data cross-checking, statistical analysis and machine learning, enable optimal processing of the volume and mass of data held by the DGFiP. According to its 2020 activity report (FR) presented on August 31, 2021, the DGFiP has called in 794 million euros of duties and penalties thanks to data mining. The share of controls targeted by AI has thus increased from 13% in 2018, to 22% in 2019, then 32% in 2020 – that is, nearly 1 in 3 controls. A target of 50% use of AI technologies to help schedule a tax audit has been set for 2022.

Pools in the taxman’s sights

To better illustrate the technological progress made by the administration, it should be noted that big data analysis also targets private individuals: indeed, for several years, the Ministry of Economy and Finance, in partnership with Google and thanks to IGN images, has been analyzing air photos to identify all the constructions that could be used in the calculation of local taxes. Swimming pools, garages, verandas…

In addition, the tax authorities received the final go-ahead in 2021, under Article 154 of the 2020 Finance Act, to experiment for three years with the collection of taxpayers’ personal data via social networks and online platforms. Thus, public data (those that do not require entering a password) put on Facebook, LinkedIn, Twitter, Airbnb, Leboncoin or Blablacar will be able to be used by the tax authorities to ensure that income or declarations match with visible elements online such as the purchase of a property, the purchase of a high fashion handbag or the construction of a pool. Another example of the administration’s progress in its detection arsenal.

An automated tax future

The DGFiP, which has seen the number of its agents decline for years, is looking to become a champion of “big data” to compensate. However, according to an information report (FR) published in July 2020, the techniques used through “data-mining and artificial intelligence software currently being developed have difficulty isolating and detecting complex fraud cases. There is therefore still a lot of room for improvement in AI and it is logical to imagine that automated controls will become more and more numerous and precise in the years to come.

To avoid risks, equip yourself with effective solutions

Thus, it is now very difficult to escape from the administration: fewer and fewer errors are slipping through its nets. In this perspective, according to the barometer of Administrative and Financial Directors 2020 (carried out by ABV Group, Associés en finance, France Invest and SVP), regulatory and legal risk has become extremely important for 20% of CFOs, and very important for 30% of them.

To reduce the risk of your company being overturned, it is important to have effective solutions. Generix Group’s Invoice Services offer dedicated to dematerialized invoice management, for example, ensures the compliance of declarations. It ensures the collection and distribution of all your data, but also the creation and conservation of tax originals.

By equipping yourself with this type of solution, you also benefit from regular innovations offering new functionalities. For example, Generix AP Automation enables you to digitize the entire supplier accounting process from data acquisition to invoice reconciliation and approval, while guaranteeing your regulatory compliance.

De plus, à partir de 2023 jusqu’en 2025, la facture électronique va progressivement devenir obligatoire pour les entreprises. Toutes les entreprises vont devoir émettre et recevoir des factures électroniques qui devront faire l’objet d’une transmission en temps réel à l’administration fiscale soit de la facture elle-même, soit d’une extraction fiable de données de la facture. L’objectif est notamment de lutter contre la fraude à la TVA. S’y mettre au plus vite permet d’anticiper sa mise en conformité et sa réorganisation, et d’éviter la surcharge d’activité forte en 2022 sur un marché où les expertises sont par ailleurs limitées.

In addition, from 2024 to 2026, electronic invoicing will gradually become mandatory for companies. All companies will have to issue and receive electronic invoices, which will have to be transmitted in real time to the tax authorities either from the invoice itself or from a reliable extraction of data from the invoice. The objective is to fight against VAT fraud. Getting started as soon as possible will allow you to anticipate your compliance and reorganization, and avoid a strong activity overload in 2022 in a market where expertise is otherwise limited.