A British national has been fined €13,500 by the French tax authority for not declaring three bank accounts held abroad.
The sanction unfolded as a result of a vehicle infringement by the individual concerned, following which tax officials became aware of her former residency status of Guernsey.
As a result of the traffic offence, tax officials decided to launch a routine contrôle fiscal into her affairs.
That process involved a home visit by tax officials, who undertook an examination of her business accounts in France.
During the visit three banks accounts held in Guernsey not previously declared to the tax authority were revealed.
Two of the accounts were held by each of her two children.
All of the income on the accounts had been previously declared each year, as revenus encaissés à l'étranger.
The transgression was merely not to have declared the accounts, as is formally required by the law.
The tax authority imposed a fine of €1,500 for each account, for the past three years, the period over which minor infringements of tax procedure can be sanctioned.
The obligation in France to declare bank accounts abroad is commonly regarded as a one-off requirement.
However, strictly speaking, the law requires that they be declared each year with your income tax return.
The form used for the purpose is Cerfa n°3916, 'Déclaration par un résident d’un compte ouvert hors de Franc
A separate declaration must be used for each account, specifying the name of the account holder, the nature of the account (savings/current), the date it was opened, name and address of the bank, and the account number.
It is not necessary to declare the sum held in the account, although, as a result of the European Tax Directive 2003 all interest
bearing accounts are automatically reported to the French tax authority
by your bank.
We contacted a senior tax official in France to discuss the obligatory nature of the annual declaration.
He considered that, as a general rule, provided a foreign bank account had been declared at least once, the requirement for an annual declaration was not ordinarily enforced.
Nevertheless, it would be prudent to discuss with local tax officials, and to confirm in writing any local understanding with them.
He also expressed some surprise at the level of enforcement imposed in this case, which he considered in large measure due to the ‘offshore’ nature of the accounts.
is no longer a 'tax haven', the formerly secretive status of the British
Crown Dependency is still viewed with interest and some suspicion by
More broadly, the case serves as a useful reminder of
the tightening of tax compliance procedures in France, as elsewhere
around the world.