Reminder: In France, all bank accounts held abroad must be declared!

The recent Anti-Fraud Act extends the reporting requirement for foreign bank accounts to inactive or dormant accounts.

Individuals, associations and non-commercial companies, domiciled or established in France, who have bank accounts abroad must mention them when filing their income tax or income tax returns. In the event of non-declaration, they incur several fines, the amounts of which can be significant.

With the Law on the Fight against Fraud of 23 October 2018, this reporting obligation is extended to inactive or dormant accounts held by the taxpayer. In practical terms, these are accounts for which no credit or debit transactions were recorded during the period covered by the declaration.

This measure will apply on a date set by Order in Council or no later than January 1, 2019.

In addition, this new law extends the scope of the 10-year recovery period available to the tax administration. Until now, this 10-year recovery period has been reduced to the ordinary 3-year period if the taxpayer proves that the total credit balances of his accounts held abroad were less than €50,000 at 31 December of the year in respect of which the return was to be made. From now on, this €50,000 threshold is assessed throughout the year, and not only at the end of the year. A change that makes it easier for the tax administration to invoke the benefit of the 10-year time limit.

Note: the recovery period is the period of time left for the tax administration to control a suspicious tax period. Beyond this period, the tax statute of limitations comes into play and the administration can no longer claim the taxes due.