Fines levied for failure to declare bank accounts held out of France
Hefty fines can be issued for each account undeclared to tax authorities
Some readers will have to declare taxes by midnight on Thursday
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Failing to declare the existence of foreign bank accounts to the French tax service can prove costly, a reader reports.
The reader says he was fined €4,500 for not declaring three current accounts that he held abroad.
He queries whether savings, as well as current accounts – checking accounts in the US – must also be declared.
Read more: Do foreign savings accounts have to be declared on French tax forms?
Top French administrative court the Conseil d’Etat previously clarified that in certain circumstances you may have to declare accounts you ‘use’ even if they are not in your name, eg. if you use them via a power of attorney.
The clarification came in the case of a widow who had inherited her husband’s US bank account and deposited liquidated US stock options he had owned into it.
Officials invoked a 10-year statute of limitations to tax the profits and fine the woman for non-declaration of the account.
Read more: Foreign bank accounts: French court clarifies rules after US account case
With regard to France’s obligation on tax-residents to declare foreign accounts as part of their annual tax return, this does in
deed apply to current and savings accounts.
The only requirement is that the accounts should be those opened, closed, used or just held in the relevant tax year.
Read more: Do foreign savings accounts have to be declared on French tax forms?
The rule on accounts ‘held’ was added a few years ago.
The fine can be up to €1,500 per account – sometimes, within limits, multiplied by years it has been held.
The fine can be €10,000 for accounts in states with no treaty with France against tax evasion.
Countries often share banking information
Many states now share information with France on points such as bank accounts.
It is advisable to ‘own up’ to missed accounts as tax offices are more likely to be lenient than if they find them via checks.
Tax lawyers say leniency can sometimes be applied to accounts with the same bank, especially if it is shown that the accounts are linked – for example, they were both opened at the same time.
These accounts – also cryptocurrency accounts and life assurance policies – are all declared via the online income tax form section, or paper form 3916 - 3916 bis.
If you wish to draw attention to any missed from 2024’s declarations, you can contact your tax office via the secure messaging in your account on the French tax site.
