For several years the tax authorities have been targeting French residents who hold undeclared bank accounts abroad. With the introduction of automatic exchange of information between countries, the French tax administration is now automatically informed by foreign tax administrations of account numbers held by French nationals.
In this context we assist individuals in regularizing their foreign bank accounts with the French tax authorities while asserting their rights.
Who must declare foreign bank accounts?
Generally, French residents must declare bank accounts opened, used, held or closed abroad during the year (article 1649 A of the French Tax Code).
Non‑resident taxpayers are, in principle, not subject to this obligation.
Which accounts must be declared?
French taxpayers must declare to the French tax administration bank accounts opened, held, used (at least once) or closed during the year abroad.
The obligation is broad: it covers not only accounts opened abroad with a bank but also accounts held with any other body or person (notary, broker, etc.).
Foreign assets concerned notably include:
The obligation applies both to account holders and to beneficiaries holding power of attorney.
When and how should foreign accounts be declared?
The declaration of foreign accounts must be made at the time of the income tax return using form no. 3916‑3916 bis (by ticking the corresponding box {8UU} or {8TT}). The declaration must be made annually.
Limitation period for non‑declaration of foreign accounts
The tax authority’s assessment period (“délai de reprise” or prescription period) is, in principle, 10 years in respect of income received through undeclared foreign bank accounts.
If foreign accounts are not declared, the risks are generally as follows:
A dedicated regularization unit (“Service de traitement des déclarations rectificatives” — STDR) formerly handled voluntary disclosures but was closed at the end of 2017.
It remains possible, however, to regularize directly with the tax services having territorial competence, even though the procedure is no longer framed as before.
Regularizing foreign accounts is delicate and requires detailed knowledge of international taxation. In such situations the tax administration may be tempted to apply the most onerous treatment “without going into the detail”. That “detail” can prove extremely costly for the taxpayer.
For many years the firm has assisted French residents to regularize accounts held abroad. Legal assistance allows preparation in advance of the information to be disclosed and anticipation of future requests from the administration in order to avoid pitfalls.
Experience shows that a sound understanding of taxation mechanisms together with negotiation skills with the tax administration produces favorable outcomes. As the regularization process is mainly written, we assist clients located throughout France.
Tax administration typically begins by sending letters to taxpayers reminding them of their tax obligations concerning accounts held abroad. These letters follow the implementation of automatic exchange of information (i.e. foreign state authorities transmit to the French tax administration information on bank accounts held abroad by French tax residents — and vice versa).
The letter’s usual subject is: “Tax obligations relating to holding an account abroad”. If you have received such a letter, it means the administration suspects you omitted to declare a bank account held abroad.
Arfé Avocats works rigorously and tenaciously to examine the specific circumstances of each case and to determine the best method to defend its clients.
The firm regularly assists taxpayers who wish to regularize their foreign bank accounts with the tax administration.
