Declaring a bank account abroad: the regulations

Do you have an account outside of France? Know that as the holder of a bank account abroad, you have obligations. Among them, that of declaring your assets. Find out in detail all the steps to take to declare a bank account abroad. What does the French regulation say on the subject? How to make a declaration or regularize the situation? What risks do you incur in the event of undeclared foreign bank accounts? We tell you everything!

Do I have to declare a bank account opened abroad?

If you are domiciled in France or Monaco, you must declare your bank account abroad, whether it is opened, held, used or closed. Are concerned by the measure the natural persons, the associations as well as the companies not having the commercial form (SCI, for example).

You are required to declare an account abroad if you are the sole or joint holder, or if you are the beneficiary of a power of attorney.

On the other hand, since 1er January 2019, the measure is also applicable to inactive and dormant foreign accounts, i.e. those where there is no movement (debit or credit).

And in addition to this obligation, you must annually declare the amount of income received (interest, dividends, capital gains) on your accounts held abroad. The value of these assets must be taken into account in the assessment of your wealth taxable to the ISF (Solidarity Tax on Wealth).

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How is the declaration made?

The declaration must be made with a bank or other organization or person such as a notary or stockbroker. This declaration of an account opened outside France must be dated, signed and attached to your declaration of income or results.

Thus, the persons concerned must indicate the references of all their bank accounts opened, closed or used abroad during the previous year (including those for which you have a power of attorney).

The declaration must then be sent to taxes by completing the Cerfa 11916*11 form

What are the risks if I do not declare an account abroad?

If you choose not to declare a bank account abroad, you risk a fine of 1500 euros (per undeclared account).

And if the bank account is located in a State that has not concluded an agreement to combat fraud and tax evasion with France, you incur a fine of 10,000 euros per undeclared account.

But beyond these fines, the offender will also have to pay tax on the undeclared sums. The recovery period is ten years. To escape this period, the taxpayer must prove that the total credit balances did not exceed 50,000 euros during the year.

Finally, if the tax administration detects fraudulent behavior, it can initiate criminal proceedings for aggravated tax evasion. You then risk a prison sentence of up to 7 years as well as a fine of several million euros.

Namely: it is common for undeclared bank accounts to be discovered by the tax authorities after denunciation. Indeed, since 2017, informers can potentially be compensated by taxes.

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Taxation of an overseas bank account

On the other hand, sums transferred abroad or from abroad through undeclared accounts are considered taxable income. Otherwise, the taxpayer must provide proof. And are also affected by the taxation of life insurance contracts.

There is also transfer tax to consider. Indeed, the administration can automatically tax assets held abroad on undeclared accounts. To escape this taxation, the taxpayer must prove the origin of these assets, at the request of the administration.

Active Fraudsters and Passive Fraudsters

The tax authorities distinguish between two situations:

  • active fraudsters whose assets were built up while residing in France. For them, the rate of increase is 30% and the fine is capped at 3% of the value of the assets;
  • and there are the so-called passive fraudsters. They then received their assets as part of an inheritance or their assets were built up while residing outside France. Concerning them, the rate of increase is 15% and the fine is capped at 1.5% of the value of the assets.

How to regularize an undeclared foreign account situation?

Since 2013, there has been a special unit so that holders of undeclared accounts abroad can regularize their situation. It was set up by the Ministry of Economy and Finance. These corrective declarations constitute a real windfall of money for the state. Thus, the government recovers more than 2 billion euros per year.

Agents therefore process requests via the Service for the processing of corrective declarations (STDR). This is a service intended for taxpayers who wish to regularize their situation spontaneously. You cannot use the STDR after a tax audit. To make a request, all you have to do is submit a complete file to the service or to the tax department of your home, which will take care of the transmission.

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The regularization application file must contain the following documents:

  • the declaration forms for accounts held abroad that you should have completed each year;
  • amended income tax returns;
  • the initial and corrective wealth tax declarations;
  • declarations relating to an estate, if applicable;
  • annual statements of accounts held abroad;
  • a certificate from the bank indicating the absence of payment;
  • a written document specifying the origin of your assets and supporting documents.

If applicable, you will also have to pay the amount of ISF and transfer duties free of charge when filing the file.

Note that the STRD does not accept incomplete applications. If you need time to collect all the documents, inform the service of your intention. This will save you from sanctions if ever you are the subject of a control in the meantime. To do this, send a registered letter or an email mentioning your identity, your contact details and your account references to be regularized.

Even if you can act alone, it is preferable to call on a lawyer or specialized firm to help you in putting together the file.

Finally, be aware that fraudsters wishing to be regularized benefit from a penal amnesty. Indeed, the administration undertakes not to prosecute them.

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