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Aerial view of a swimming pool, with beach chairs beside it.
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French tax office splashes out on AI tool to spot illicit swimming pools

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Software trained to spot undeclared swimming pools has raked in an additional €10m (£8.5m) worth of tax revenue for the French authorities.

31st Aug 2022
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The machine-learning tool, which was deployed across nine French regions during a trial in October 2021, helped French authorities unearth 20,356 undeclared private pools and levy additional taxes on applicable households.

Under French law, pools must be declared as property taxes are calculated based on rental value, so pools can increase the value of a property – and hike the amount of tax individual homeowners pay. According to Le Parisien newspaper, which first reported the news, a 30-square-metre pool is taxed at €200 (£170) a year.

Developed by Google and French consulting firm Capgemini, the machine learning application was trained to scan publicly available aerial images of properties for indications that a swimming pool was present – with the most obvious being blue rectangles in back gardens. Once identified, the pool’s address was confirmed and cross-checked against national tax and property registries.

The Guardian reported that the software had a 30% error rate in April 2022, as it would often mistake solar panels for pools or miss existing pools if they were heavily shadowed or partially covered by trees.

Expanding deployment

The French Treasury said the tool will now be expanded across the country, where it expects to pull in around €40m (£34m) in new taxes on private pools in 2023 – outstripping the £24m cost of developing and deploying the software.

The tool could eventually be used to find undeclared home extensions, patios or gazebos – items that are also taken into account when calculating French property taxes.

“We are particularly targeting house extensions like verandas, but we have to be sure that the software can find buildings with a large footprint and not the dog kennel or the children’s playhouse,” Antoine Magnant, the deputy director general of public finances, told Le Parisien. “This is our second stage of research and will also allow us to verify if a property is empty and should no longer be taxed,” he added.

According to the professional pool federation (FPP), France is the largest market in Europe for swimming pools, with an estimated three million private ones in existence, thanks in part to a boom in construction during Covid-19 lockdowns and the recent heatwaves.

However, the issue has proved contentious this year, with France suffering from a drought that has led to rivers drying up, restrictions on water usage and one MP for the French Green party calling for a ban on the construction of new private pools.

Replies (5)

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Caroline
By accountantccole
01st Sep 2022 10:56

oooo French tax article - thank you :-)

Thanks (1)
Ivor Windybottom
By Ivor Windybottom
01st Sep 2022 11:43

This follows on from other tax authorities using Google satellite images - see this high quality reporting from "The Sun":
https://www.thesun.co.uk/news/9920159/crimes-solved-google-earth-missing...

The article suggests Greece uncovered 16,500 swimming pools, while Italy charged an additional €7m tax on an under-reported property sale.

Thanks (1)
By ireallyshouldknowthisbut
01st Sep 2022 12:17

Meanwhile in the UK we spend much larger sums making tax much harder to administer, and spend virtually nothing on routine compliance work, let alone proactive compliance of this nature.

Client today claimed £8,000 back on VAT building costs for essentially an extension on his home, and swears blind he asked HMRC and they said it was fine. To be fair to him, he probably did. Had he done his own partnership accounts he would have probably gotten away with it. And probably claimed it as an expense to boot given where he booked it in his nice shiny MTD compatible software he does the VAT in as its "so easy he doesn't need us to press the button".

Thanks (3)
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By JustAnotherUser
01st Sep 2022 14:03

excellent use of AI, bravo to the French and those involved.

in other news, the UK government could add an IF statement to detect BBL fraud. :)

Thanks (1)
Replying to JustAnotherUser:
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By Hugo Fair
01st Sep 2022 19:12

... unlikely - although they may be issuing a consultation on the alternative types of committee that could be set up to attempt a definition of the concept of 'ELSE' (prior to any agile development of prototype values to put in the Statement)!

Thanks (1)