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French government says McKinsey will pay all taxes it should pay – Metro US

French government says McKinsey will pay all taxes it should pay

Logo of McKinsey and Company is seen at VivaTech fair
Logo of McKinsey and Company is seen at VivaTech fair in Paris

PARIS (Reuters) – President Emmanuel Macron on Wednesday confirmed that a preliminary investigation linked to tax fraud had been launched into the French arm of US consultancy firm McKinsey by France’s national financial prosecution office PNF.

PNF earlier on Wednesday said launched a tax fraud probe linked to consulting firms without specifying which firms were the target of the preliminary investigation.

“We will know at the end of this judicial investigation if there had been fiscal fraud by this company or not,” Macron was cited as saying in an interview with paper Le Figaro.

The use of private consultants by the government of President Emmanuel Macron, who has lost momentum in opinion polls ahead of the first round of presidential elections on Sunday, has emerged as a surprise issue in the campaign.

McKinsey said in a statement on Wednesday that it would continue to respond to all questions that French authorities may have and that it respects French fiscal and social regulations.

“McKinsey’s fiscal approach is … in line with OECD directives and has been shared with the French tax administration,” the firm said.

The French Senate, which is dominated by the conservatives, in March had launched legal action against McKinsey, alleging that a company executive gave false testimony when he told senators McKinsey was paying corporate taxes in France.

The controversy comes as rivals of President Emmanuel Macron accuse the government of lavishly spending taxpayers’ money on international consultancies during its term.

According to a French Senate report last week, French ministries have more than doubled spending on outside consultants from 379 million euros ($417 million) in 2018 to 894 million euros last year.

Far-right candidate Marine Le Pen, who in the last days ahead of the first vote on Sunday has been gaining momentum, called the controversy a “state scandal”.

Macron in the Figaro interview denied political responsability for the controvery around the government’s hiring of consultancies.

He said that “it is not the president who signs the contracts (with consultancies)”, adding “it is the responsability of the administrations, ministers and service providers.”

According to the latest opinion polls, Macron would beat Marine Le Pen in the country’s presidential election later this month, though Le Pen has significantly gained ground.

(Reporting by Tassilo Hummel; Editing by Benoit Van Overstraeten and David Evans)

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