Taxman to pay for information on wealthy people living in France but not paying tax

Wealthy foreign residents who are living in France for a large part of the year and who do not declare themselves as tax resident – thus avoiding wealth tax and income tax – could be caught in a new tactic by the tax office which is starting to pay informers.

Shopping a tax dodger could earn the informant a handy little bounty from the tax man – but only if they are informing on someone putting money in an undeclared foreign bank account or denouncing a wealthy person living full-time in France and not paying tax.

The ‘fisc’ has said it will pay tax-payers who denounce tax evaders but only those informing about people committing ‘international-scale offences’ in a bid to avoid being swamped with ‘twitchy curtain’ neighbours turning in small-scale offenders.

Passed as part of the last finance law, the move is a first in France where informing on people has long been rejected but is already in widespread use in the US and Germany.

The move is valid for two years and is aimed at large-scale offenders. It will apply to people putting money into foreign accounts or tax havens to avoid paying wealth tax in France – but also to people who are living in France but not declared as tax-resident and thus avoiding wealth tax and income tax.

The new measure also covers non-declared foreign accounts, declarations on accounts and policies – such as assurance vie and trusts – whether held in France or elsewhere.

The sum paid to the informant will depend on the role they play (amount of information) and the ‘benefit’ to the fisc.

• For information on tax residency in France and income tax, you can buy our helpguide 2017 French Tax Forms from this link – it costs €12.50 for a pdf or print copy (plus P&P for the print version).