Greater rates of information exchange between countries are leading to more people being caught out over undeclared foreign bank accounts and other ‘accounts’ deemed equivalent.
A system of automatic exchange of banking and financial information between countries belonging to the OECD group of developed economies was put in place in 2017.
At the end of the same year France closed a temporary service specifically aimed at letting people own up to undeclared accounts spontaneously so as to have lighter penalties.
Now, “countries are starting to know how to make use of this data so we’ve entered a new era,” according to a specialist quoted by Le Figaro.
Financial lawyer Corinne Dadi, of Everlaw Tax, told the media: “Letters from the Fisc are more and more frequent and concern people who missed out on the regularisation service.”
Many people have in recent years caught on to the need to declare such accounts: Whereas only 327,000 households declared one in 2017, there were more than a million in 2020.
Which accounts have to be declared?
The declaration of foreign accounts refers to declaring their existence on the online section or paper form 3916. It does not refer to declaring any profits they may generate (these need to be declared but in other sections of the income declaration).
The help notes to the section / form say the accounts in question are ones that ‘habitually receive deposits’, however one financial expert who works with the English-speaking community said it is safest to declare all accounts that are capable of holding money in them.
This includes, for example, bank and neobank accounts. People are also required to declare cryptocurrency accounts and also overseas life assurance and similar investment policies.
During the declaration process online this year a note refers to “accounts of the PayPal and Transferwise type” as being among kinds which can be concerned.
However, accounts do not have to be declared if they are adossé à (linked to) a French bank account, are used for online purchases or to deposit money from selling goods online, and, in the latter case, you do not deposit more than €10,000 a year into the account related to this.
If you have not declared an overseas account or accounts it is advisable to do so as tax offices may make allowance for genuine mistakes.
Otherwise, the penalties for non-declaration are €1,500 per account for bank and similar accounts and for investment policies (€10,000 for accounts in certain countries with which France has no tax evasion treaty) or €750 for cryptocurrency accounts if the value is less than €50,000.