The French tax authorities do not have direct access to bank accounts opened abroad, as they may have for French accounts. But thanks to the automatic exchange of bank data between States, they receive a large amount of information every year on accounts held outside France by French tax residents.
This article explains how the tax authorities are informed, what information they receive and when, the case of accounts in the United States, what they can do with this information and what is at stake when an account has not been reported. As every situation is different, an analysis with a lawyer is generally useful before taking any step.
In brief
- The French tax authorities have no direct access to accounts opened abroad, but every year they receive information from many States on accounts held by French residents.
- This information covers in particular the holder’s identity, the account number, the balance on 31 December and the income paid.
- It is sent no later than 30 September of the following year; this often explains a pre-ticked box 8UU or a letter no. 751-SD.
- The tax authorities may also request information from the State concerned, or from the taxpayer, to obtain more detailed statements.
- An unreported account in principle exposes the taxpayer to fines and tax reassessments; whether to regularise deserves to be examined with a lawyer.
Contents
- How are the tax authorities informed of foreign accounts?
- What information do the French tax authorities receive?
- When does this information arrive?
- What about accounts in the United States?
- Can the tax authorities obtain bank statements?
- What do the tax authorities do with this information?
- And if an account has not been reported?
- What I see in my cases
- FAQ
How are the tax authorities informed of foreign accounts?
More than a hundred States and territories apply the OECD Common Reporting Standard (CRS). Financial institutions in these States identify those of their customers who are tax residents of another State, and the information concerning them is then sent every year, without any specific request, to the administration of the State of residence. An institution may in particular know that a customer is a French tax resident:
- because the customer stated, in a tax residence self-certification, that they are a French tax resident, giving their French tax number;
- because the address held by the institution is in France;
- because other indications link the customer to France, for example French identity documents, a French telephone number or regular transfers to an account in France.
What information do the French tax authorities receive?
The information sent in principle covers the following:
| Information | Content |
|---|---|
| Holder’s identity | Name, address, tax identification number, date and place of birth |
| Account | Account number and name of the financial institution |
| Balance | Balance or value of the account on 31 December of the year, or a note that it was closed |
| Income | Gross amounts of interest, dividends and other income paid into the account |
| Disposals | Gross proceeds from sales or redemptions of financial assets |
When does this information arrive?
Information for a given year is in principle sent to the French tax authorities no later than 30 September of the following year. The first exchanges took place in 2017, on 2016 accounts; Switzerland, for example, has been sending its data since 2018. This explains why the box for foreign accounts may appear pre-ticked on the income tax return.
What about accounts in the United States?
The United States does not apply the OECD Common Reporting Standard. Information on accounts held in the United States by French residents is nevertheless sent to the French tax authorities under the agreement concluded between France and the United States on 14 November 2013. This exchange mainly covers US-source income, such as interest and dividends, rather than account balances. An account held in the United States is nevertheless in principle reported every year in France, like any other account opened abroad.
Can the tax authorities obtain bank statements?
The automatic exchange does not cover the detail of transactions: the tax authorities do not automatically receive account statements.
They may, however, depending on the case, send a request for information to the administration of the State concerned, under a tax treaty or the European administrative assistance rules. They may also ask the taxpayer for supporting documents, in particular where a foreign account has not been reported or in the course of an audit. In practice, these more detailed requests mainly occur in significant cases or where the taxpayer does not cooperate.
What do the tax authorities do with this information?
The tax authorities compare the information received with taxpayers’ returns. Where an account has not been reported, they may, depending on the amounts at stake, pre-tick box 8UU on the income tax return, remind the taxpayer of their obligations, or send a letter no. 751-SD inviting them to regularise their situation, in principle over ten years, by providing a complete file.
The issuing department, often a pôle de contrôle des revenus et du patrimoine (PCRP), in principle appears at the top left of the letter, and the reference 751-SD at the top right. The reply to this letter is binding for the rest of the procedure: it is generally useful to prepare it with a lawyer. A tax audit may also be opened, particularly where the amounts are significant or the taxpayer does not reply.
And if an account has not been reported?
An account opened, held, used or closed abroad is in principle reported every year on form no. 3916, attached to the income tax return, by ticking box 8UU, even if it is dormant. An omission is in principle punishable by a fine of €1,500 per account and per year (€10,000 if the account is located in a State or territory that has not concluded an administrative assistance agreement with France), and the period during which the tax authorities can adjust income tax in principle increases from three to ten years, unless the total balance did not exceed €50,000 at any time during the year.
Before taking any step, it is advisable to consult a lawyer to analyse the situation: depending on the case, a regularisation before the tax authorities come forward may be an appropriate solution. See the article regularising an undeclared foreign account: what to do if you forgot to declare it?.
What I see in my cases
In the audits I handle, the tax authorities generally have precise information, received from abroad, on significant amounts. I have handled many cases with the PCRP (pôles de contrôle des revenus et du patrimoine, the departments that audit individuals) throughout France: I know what information they generally receive and how they use it. That is why a methodically built file, which starts from this information and puts it back into context, weighs so heavily on the outcome of the procedure.
These exchanges between countries are what has changed most in recent years. In my cases, undeclared accounts are almost always discovered in this way, through a letter from the tax authorities. They are located in all the countries of the European Union, in the United Kingdom, the United States, Israel, China, Hong Kong, Singapore and, increasingly, in Argentina and Canada.
FAQ
Can the tax authorities see the transactions on my account abroad?
Not automatically: the automatic exchange covers the annual balance, income and sale proceeds, not the detail of transactions. The detail may, however, be requested, depending on the case, from the foreign administration or from the taxpayer.
Do all countries send information to France?
No, but a large proportion do: more than a hundred States and territories take part in the automatic exchange. The United States sends information under a specific, less complete agreement.
Is an account closed during the year reported?
In principle yes: the closure of the account is reported, and the account in principle appears on the form no. 3916 for the year in which it was closed.
How can I know whether the tax authorities have received information on my account?
A pre-ticked box 8UU on the income tax return, or receiving a letter no. 751-SD, is often a sign. The absence of these signals does not, however, mean that the tax authorities have received no information.
Is a 751-SD letter a tax audit?
In principle, no: it is a request for information, which generally precedes a possible audit. The reply, which is binding for what follows, deserves to be prepared with a lawyer.
Read more
- The Automatic Exchange of Bank Account Information (CRS)
- Tax Return 2042: Foreign Accounts, Box 8UU or 8TT Pre-Ticked
- Which Foreign Bank Accounts Must Be Declared in France?
- What Fines Apply for Failing to Declare an Account Abroad?
- Request to Regularise an Undeclared Foreign Account: What to Do and What to Expect
