"Guetta’s Tax Trouble: Inside the Jersey-connected 'My Love Affair Case"

Headlines reported in France and Jersey

• “A London mailbox, Jersey holding companies, and millions in French brand deals… that’s the structure at the heart of a tax evasion case involving superstar DJ David Guetta and his ex-wife.
• “Both Guettas and used Jersey-based holding companies to own their shares in the agency. With a third Jersey-based company involved, more than half of My Love Affair’s shares went through Jersey.
• My Love Affair was said to operate from London; their only base there was a 193 square foot office intended to house little more than a basic computer workstation,
• “My Love Affair was handed a €1.9 million bill for their French taxes from 2011 to 2014. The company was also handed a 40% penalty for ‘wilful misconduct’.”
• “After that initial decision by the Paris Tribunal administratif in 2022, Mr Aflalo appealed against the decision that his company should pay back French taxes.”
• “My Love Affair’s lawyers argued that the Paris administrative tribunal had made a mistake by saying they were actually based in France, not London, and didn’t have enough reasons to claim this.”
• “However, the French Conseil d’État – France’s highest administrative court – threw out the appeal last month.”

Background:

• In 2011, David Guetta, his ex-wife Cathy Lobé, and business partner Raphaël Aflalo established My Love Affair Limited, a UK-registered marketing agency initially named Be My Guest Communications Limited.
• Branded a "brand entertainment agency," it secured high-profile campaigns, including Iggy Pop-branded Kronenbourg cans, Avicii’s Alcatel OneTouch ads, and a 2015 Nescafé campaign featuring Will.i.am.
• French media dubbed it the Guettas’ "cash machine" in 2014 due to its significant revenue.

Structure and Operations:

• Over half of the agency’s shares were held through Jersey-based holding companies, with a minimal London presence limited to a 193-square-foot office housing a basic computer workstation.
• A 2015 raid by French authorities on the agency’s Paris offices uncovered contracts and paperwork for French staff, indicating operations were primarily managed from France, contradicting the London-based claim.

Tax Evasion Allegations and Legal Proceedings:

• In 2022, the Paris Tribunal Administratif ruled that My Love Affair owed €1.9 million in back taxes (corporate tax and VAT) for 2011–2014, plus a 40% penalty for deliberate misconduct, implying intentional tax evasion.
• The company appealed, arguing it had no permanent establishment in France and that the taxation procedure was flawed. The Cour Administrative d’Appel de Paris rejected this in September 2024, affirming a stable French establishment.
• In July 2025, the French Conseil d’État, France’s highest administrative court, upheld the ruling, confirming the tax liability and penalty based on the agency’s operational presence in France, supported by its French subsidiaries (BMCG Services France and Dayclic) and director involvement.

Key Legal Points:

• The case centred on the concept of “establishment stable” under French tax law and the Franco-British tax treaty, with courts determining that the company’s French operations constituted a fixed place of business.
• The ruling sets a precedent for taxing international marketing and entertainment firms operating across borders.

Key Risks:

• Tax Evasion and Non-Compliance: Using Jersey-based holding companies and a nominal London office to obscure French operations led to accusations of deliberate tax evasion.
• Financial Penalties: The €1.9 million tax bill, plus a 40% penalty, creates significant financial exposure for the company and its stakeholders.
• Reputational Damage: Public exposure of the case risks reputational harm for high-profile figures like David Guetta and Cathy Lobé.
• Legal and Regulatory Scrutiny: The failed appeal highlights potential for further legal consequences and increased scrutiny of offshore financial structures.
• Operational Misrepresentation: Claiming a London base while operating primarily in France exposed the company to allegations of fraudulent practices.

References

• Cour administrative d'appel de Paris, 7ème Chambre, 26 September 2024 ...https://justice.pappers.fr/decision/8eb990890b7aba8c75d507327fba66696e9999db
•  https://www.bailiwickexpress.com/news/david-guettas-cash-machine-three-jersey-companies-and-a-1-9m-tax-bill/