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bases, complying data privacy regulation, helps also the two public bodies to ensure
their process of providing benefits and tax refunds.
Undeclared employment: a loss of revenue in every domain

Concealed employment, commonly called as "black employment" constitutes a
major issue for its consequences in France and unfortunately in most countries,
industrialized or not. This type of fraud has been assessed in France by the Court of
Auditors and the national body responsible for collecting social security
contributions (ACOSS) between € 20 and 25 billion per year. Beyond the budgetary
impact represented by this fraud, undeclared employment also leads to significant
competition distortions between companies that comply with social and tax
legislation, and those who choose not to declare a part of their activity, and to
employ undeclared workers.
Besides the loss of contributions calculated on the amount of salaries paid to
employees, this fraud also has an impact on the tax revenue. Indeed compensation
paid mostly in cash is not subject to income tax and the turnover achieved by
undeclared employees is mostly not subject to corporation tax and of course the
VAT due for this activity is never paid. Finally, unregistered employment also allows
beneficiaries to receive unemployment benefits and social benefits calculated on
the amount of income subject to tax.
This could be called a "win-win" fraud. A win for the company that hides a part of his
turnover and reduces his tax burden, and a win for the consumer who has the
opportunity to pay a lower price for the goods or services, and a win for the worker
who can cumulate salary (compensation), social benefit, and low income tax.
On the other hand this is a real "lose-lose" system. The losses of tax and social
contributions are higher than the small financial advantage that the consumer can
have by paying his goods or services to a fraudulent business. The evaluation made
by ACOSS about the loss of social contributions on wages, can also help to
understand the importance of the unregistered employment. Based on the rate of
social contribution and the legal minimum of wage in France (SMIC), unregistered
employment in France according the SMIC data is close to 1 million people. This
does not exclusively mean that 1 million people are "black workers", but it does
mean that this fraud could have been used to pay annually wages to 1 million
employees.

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