businessman Harb Al-Zuhair has denounced the French authorities for
suing him for allegedly dodging tax payments on his assets worldwide
and said the move was a flagrant violation of an agreement between
Riyadh and Paris on double taxation.
“I have produced
every evidence to prove that I am a Saudi citizen permanently settled
in Saudi Arabia and that I’m subject to its zakah system. But the
French authorities wanted to levy taxes on all my income and
businesses in the Kingdom,” said Al-Zuhair, chairman of Harb
Al-Zuhair Group of Companies.
The French tax
authorities have filed a lawsuit against Al-Zuhair, demanding 80
million francs in tax for conducting business activities from France
from 1996 to 1998. A French court is now looking into the case.
Al-Zuhair said he
considered the French move “an attack on him to grab his money in an
unjust and unfair manner.” He also described the action as a
violation of human rights. Al-Zuhair has already lost two million
francs in the legal battle. Most of the money was spent on French
lawyers who charged him “exorbitant fees”.
He urged the Saudi
government to act vigorously to protect the rights of its citizens
abroad and defend its international reputation. “I have heard from a
French lawyer that the tax authorities in France would not take any
documents attested by Saudi agencies seriously. This is a flagrant
attack on our country,” Al-Zuhair added.
He called for a
review of the bilateral double taxation agreement to remove all the
loopholes that might be exploited by the French tax authorities. “I
am saying all this because every Saudi who owns properties or
businesses in France could be subjected to similar harassment by the
French tax authorities, whenever they feel so and when they receive
any complaints against a Saudi visitor,” he said.
businessman said the French tax authorities have been harassing him
for the past three years. Muhammad Ziad Al-Zuhair, his office
director, said Al-Zuhair was very upset by the French action, and
hinted that he would curtail his visits to France so that its tax
authorities would not find any fresh reasons to harass him.
out that his group of companies has vital ties with many French firms
and was procuring them business worth millions of riyals in Saudi
Arabia and other Gulf states.
authorities moved the court against Al-Zuhair on the grounds that he
stayed in France and owned a house in Larressore in the southwest of
the country since 1987. They also claimed that he managed his
businesses in Saudi Arabia from France and had bank accounts in
France. Al-Zuhair has a substantial stake in a French-Arab bank named
SBA, established 20 years ago in Paris. “I don’t have any business
in France and I pay tax for my real estate properties in France and
for the SBA share,” he said.
“I don’t see
any reason for the French tax authorities to run after me as I am a
Saudi citizen living and doing business in Saudi Arabia, and I am
subject to Saudi taxation rules,” he explained. “I don’t know
what is brewing against me in the corridors of the French Tax
Department,” Al-Zuhair said and called on top Saudi officials to
come to his help.
The French tax
authorities had previously ordered the Electronic Equipment Marketing
Company (EEMCO), one of Al-Zuhair’s companies, to pay 65 million
francs in tax after EEMCO had won a confidential defense contract in
Saudi Arabia. “We took them to court and won the case. The court
told them, ‘You have no right to tax EEMCO because it’s purely a
Saudi company and Mr. Al-Zuhair is not residing in France’. The
court asked them to pay EEMCO a compensation of 5,000 francs but they
did not pay anything. After that, in 1997, they hit me personally to
take revenge. They demanded tons of information and I produced all the
documents they wanted.”
that all his income came from his businesses in Saudi Arabia. “Every
penny I transferred to France came either from my deposits in the
Kingdom or Switzerland.”
French tax officials raided his flat in Paris, his house in Larressore
and the SBA premises in 1996. “Seven officials raided our home in
Paris at seven in the morning. Because of the shock my wife suffered a
miscarriage and we lost a baby.” He said the officials had also
tapped his phones for six months to determine whether he was running
his businesses from France.
multiple entry visas to France, and his office director said his boss
never exceeded the period of stay set by the French immigration
authorities. Al-Zuhair disclosed that the French lawyers had asked him
to bribe unknown persons to reach an out-of-the-court settlement, but
the French authorities would confiscate his properties in southwest of
France and his bank shares. He is trying to settle this issue through
political and diplomatic channels.
The Saudi Foreign
Ministry has intervened in the matter and urged the French authorities
to wait until the court gave its ruling. According to Al-Zuhair, the
ministry had called French Ambassador Bernard Politti to discuss the
issue. Saudi Ambassador to Paris Faisal Al-Hujeilan has expressed his
hope that the court decision would be in favor of the Saudi
businessman. He said a senior judge in Paris with executive powers had
revealed that there was no definite evidence proving Al-Zuhair was
running business activities from France.
economic and financial counselor at the French Embassy in Riyadh, has
sent a letter to the French Department of Tax saying he had
scrutinized the papers that proved Al-Zuhair was a permanent resident
in Saudi Arabia and carried out his business activities from there.
Minister of Finance
and National Economy Dr. Ibrahim Al-Assaf has advised Al-Zuhair to
follow up the case personally through the embassies in Riyadh and
Paris and through the ministries of Foreign Affairs and Finance.
Al-Zuhair has also contacted the Council of Saudi Chambers of Commerce
and Industry seeking support.
Saudi Embassy in Paris sent a letter to the French Foreign and Finance
ministries in December 2000 requesting their intervention in the case
but up till now there was no response from the French authorities.