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France's Finance Chairman facing tax nightmare

(R) President of the Financial Commission Gilles Carrez, (C) French Finance Minister Michel Sapin (C) and (L) Budget Minister Christian Eckert attend a parliamentary financial commission hearing in Paris, October 1, 2014. REUTERS/Jacky Naegelen

The Chairman of France's National Assembly finance committee, Gilles Carrez may have to undergo a tax reassessment after 'forgetting' to pay his wealth tax for three years. Carrez apparently claimed a tax allowance on his main property which he was not entitled to. He and several other MPs are currently in trouble with the tax office.

The information was revealed by online newspaper Mediapart on Saturday, and has not been denied by Gilles Carrez.

The President of the National Assembly maintains however that he did not knowingly forget to pay his wealth tax, because he didn't think he needed to.

In France, the wealth tax or ISF applies to wealthy homeowners with assets totalling over €1.3 million.

To get out of paying it, Gilles Carrez had applied a tax allowance of 30% on his home bringing the total value below the €1.3 million threshold.

So why is he now being hounded by the tax office?

Because he converted his home into an SCI - a private, limited company to be used for rental purposes. In France, the 30% tax break doesn't apply on SCI holdings.

Putting his hands up in shame, Carrez declared, "if the tax authorities think that I should pay the wealth tax, I won't argue."

The Finance Chairman is one of sixty parlementaries battling with the tax office, after their asset declarations revealed some dodgy practices.

The new rules of transparency were enforced in the wake of the Jerome Cahuzac scandal-which saw the disgraced budget minister forced to resign for hiding his assets in Swiss bank accounts.

The definitive list of deputies treading a thin line with the tax office won't be known until Christmas.