France Tax Alert - Voluntary disclosure of foreign assets

11 September 2013

While the draft Bill relating to combat tax fraud and serious economic and financial crimes, in the process of being adopted in September 2013, strengthens the means for the French Tax Authorities (FTA) to fight against tax evasion, the French Minister of Budget published on June 21st, 213, guidelines inviting French tax residents owning undisclosed foreign assets (bank accounts, life insurance,…) to voluntary and spontaneously file in amending tax returns to regularize the tax status of such assets as from September 2013.

No amnesty is contemplated and penalties would apply under condition of ordinary law. However, taking into account the taxpayer voluntary approach, the penalties for deliberate neglect (40% in principle) and the yearly fine for non-disclosure of foreign assets (5% in principle) could be diminished through a settlement with FTA. This would depend on the nature of the tax evader (active or passive).

Given the potential issues raised by these guidelines as regards to their interpretation and application, tax lawyers members of I.A.C.F. (Institute of Tax Lawyers Advisors) recently sent to the FTA on a technical note aiming at dealing with approximately 95% of issues (mainly regarding inheritance, gifts…) and completing these guidelines.

A quick answer from the FTA is expected in order to officially send, on a secure basis, regularization files as soon as the DNVSF (National Office of Tax Status Audits), in charge of centralizing the requests, is in place in September 2013.

In this context, we are able to offer you assistance, through our Bird & Bird network and our correspondents, to regularize your tax status with the FTA before the end of 2013.

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