Declaring foreign bank accounts, digital assets accounts, or specific contracts held outside France

Failure to comply can lead to heavy penalties. The deadlines for 2023 already expired. However, tax returns can be corrected until 7 December 2023. The Ecovis experts know exactly what needs to be done and when.

French tax resident individuals must declare their foreign bank accounts, digital assets accounts and foreign capitalisation contracts in their annual income tax return using Cerfa Form 3916-3916 bis. The deadlines for 2023 were 25 May, 1 June or 8 June, depending on the taxpayer’s département of residence. However, it is still possible for taxpayers to file amended returns. To ease the process, online correction will be available through the impots.gouv.fr website from 2 August to 7 December 2023.

What had to be declared?

Bank accounts (or digital assets accounts) opened abroad, held, used, closed, or on which the taxpayer has a power of attorney. As a result, this obligation also concerns foreign bank accounts of companies for which French individual taxpayers hold a proxy (e.g., as director of a foreign company). It should be noted that bank accounts held abroad, backed by another account opened in France and whose purpose is to make online payments for purchases or receipts relating to sales of goods, do not have to be declared when the sum of annual receipts credited to this account and relating to these sales does not exceed EUR 10,000 (e.g., paypal).

Comply with your foreign accounts or contracts declaration or face the threat of sanctions.

Vanessa Raindre, Tax partner, MD Legal, Paris, France

In the case of bank accounts and digital assets accounts, the following information must be reported:

• Name and address of the banking institution (or of the digital asset manager)
• Number of the account, type of use (private, professional, both), type of account (current, saving, etc.), date of opening, and date of closure if applicable
• Identification information of the applicant and information about the status under which they are declaring (i.e., as the owner of the account or as a proxy)
• In case of a proxy: identification of the account owner

In the case of foreign capitalisation contracts or investment contracts (including life insurance contracts), the following information must be provided:

• All the identification elements of the subscriber
• The name and address of the insurance institution
• The type of contract, its number and the nature of the risks guaranteed
• The date of effect and contract duration
• The date and amounts of each redemption operation (partial or total), and the sum of premiums paid during the year
• If applicable, the surrender value or the amount of capital guaranteed, including in the form of an annuity

Sanctions

If the declaration of foreign bank accounts or foreign contracts is not filed, taxpayers can be subject to a fine of EUR 1,500 per account/contract not declared, or EUR 10,000 where the reporting obligation concerns a state that has not concluded a tax treaty with France containing an administrative assistance clause (Articles 1736 IV and 1766 of the French Tax Code “FTC”). The tax administration can apply this fine to the current tax year, as well as the last 3 years.

The sanction for digital assets accounts is set at EUR 750 per undeclared account and EUR 125 per omission or inaccuracy, capped at EUR 10,000 per return (Article 1736 X of the FTC). These amounts are increased to EUR 1,500 and EUR 250 if the value of the account is higher than EUR 50,000.

Not declaring foreign bank accounts might also have an impact on the level of penalties applicable in the case of a tax audit on undeclared income (80% instead of 10% or 40%), and on the tax administration’s statute of limitation (10 years instead of 3 years, except if the balance of the foreign account has not exceeded EUR 50K).

For further information please contact:

Vanessa Raindre, Tax partner, MD Legal, Paris, France
Email: vanessa.raindre@mdlegal.fr