McKinsey is facing one of the most significant financial actions yet in a long-running French tax investigation after Belgian authorities seized €65.2 million, around ₹716 crore, at the request of French prosecutors.
The money was seized on August 19 as part of an investigation into suspected aggravated tax fraud and money laundering involving the US consulting giant. French and Belgian prosecutors announced the action jointly on September 4.
French authorities say the seized amount represents around 96% of the tax loss they currently estimate in the case.
But the action is provisional.
McKinsey has not been found guilty of tax fraud, and the preliminary investigation remains underway. Any final liability would ultimately have to be determined through the judicial process.
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Why France Has Been Investigating McKinsey Since 2022
The case traces back to a French Senate inquiry into the growing use of private consulting firms by the government.
In March 2022, senators reported that McKinsey’s French entities had paid zero corporate income tax in France for at least 10 years, covering the period from 2011 to 2020, despite generating substantial revenue in the country.
The Senate inquiry found that McKinsey was legally subject to French corporate tax but had reported no taxable corporate profit during those years.
According to the Senate report, one important issue was the use of transfer pricing — payments made by French entities to related companies within the wider McKinsey group.
The Senate said those payments were large enough to help reduce taxable profits in France to zero or negative levels.
McKinsey had maintained that it complied with applicable French tax and social-security laws.
The controversy became politically explosive because the firm had also worked on major French government projects, including assignments connected with Covid-19, public administration and education.
What Transfer Pricing Actually Means
Transfer pricing refers to the prices charged when companies within the same multinational group trade with each other.
For example, a French subsidiary may pay its US parent company for management services, intellectual property or technical support.
Such payments are legal when properly priced and documented.
The problem arises when tax authorities suspect that internal charges have been set in a way that artificially moves profits from a higher-tax country to another jurisdiction.
Imagine a French business earning €10 million but paying €9.5 million in internal fees to another group company abroad.
Its taxable profit in France could become very small, even though the business itself generated significant revenue.
That does not automatically amount to tax fraud. Investigators must establish whether the arrangements complied with tax rules and reflected genuine economic activity.
Police Raids and Cross-Border Cooperation Followed
French prosecutors opened the preliminary investigation in March 2022 after the Senate inquiry.
McKinsey premises, including its Paris offices, were searched in May that year. Witnesses and suspects were later questioned during 2025 and 2026.
French prosecutors then sought assistance from the Brussels prosecutor’s office.
That international cooperation led Belgian authorities to seize €65.2 million from McKinsey-related funds in Belgium.
The involvement of Belgium does not necessarily mean the alleged tax offence occurred there.
It means prosecutors believed assets relevant to securing a potential future financial recovery were located within Belgian jurisdiction.
What Does a Provisional Seizure Mean?
A provisional seizure is not the same as a fine.
Authorities freeze money or property so that it remains available while an investigation or court proceeding continues.
If the company is eventually found liable, the assets may potentially be used to satisfy tax debts, penalties or confiscation orders.
If the allegations are not proven, the legal basis for retaining the funds can disappear.
This distinction is especially important in the McKinsey case because no court has yet ruled that the firm committed tax fraud.
French prosecutors have said the €65.2 million corresponds to almost all of the tax damage they currently estimate, but that figure remains part of an ongoing prosecution theory rather than a final court judgment.
The Case Grew From a Wider Consulting Controversy
The tax investigation emerged from a broader political debate over France’s reliance on private consultants.
The Senate’s 2022 inquiry criticised the government’s use of external consulting firms and questioned whether public administrations were becoming too dependent on private advisers.
McKinsey became the most politically visible company in that debate.
The Senate highlighted one education assignment costing close to €500,000 and questioned whether external consultants were needed for work that government departments could potentially have carried out themselves.
That controversy eventually became known in French politics as the “McKinsey affair”.
The latest €65.2 million seizure brings the tax element of that dispute back into focus.
For prosecutors, the next step will be proving whether McKinsey’s French tax arrangements amounted merely to lawful multinational tax structuring or crossed the line into fraudulent conduct and laundering of tax-fraud proceeds.
Until a court makes that determination, the allegations remain unproven.
What this means for you: A government seizure does not automatically mean a company has been convicted or fined. In major financial investigations, authorities can provisionally freeze assets first and later ask a court to decide whether those funds should ultimately be confiscated.
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