It is very simple: there is an international agreement that requires foreign banks to send the French tax authorities, every year, banking information about their French clients.

This agreement does not cover every country in the world, but it does cover a good many of them.

If a foreign bank is aware that you are tax resident in France, and it is located in a country that is a party to the international agreement, it will then send banking information every year to the French tax authorities.

How does my foreign bank know that I am tax resident in France?

There are several possibilities:

• You opened your account with a French identity document
• The address the bank holds for you is a French address
• The bank sent you a tax self-certification form, and you provided a French tax identification number

What information does the foreign bank send to the French tax authorities?

Of course, this may vary somewhat from one bank to another, but it generally consists of:

• The account balance
• The amount of financial income (interest, etc.) credited to the account
• The opening date of the account
• The name and address of the account holder

Once the French tax authorities receive this information, what do they do with it?

They start by classifying the accounts according to their size: “small” accounts and “large” accounts.

Holders of “small” accounts are generally not subject to a tax audit, but simply receive a reminder of their obligations.

Holders of “large” accounts, on the other hand, generally receive a letter (or several) at their home asking them to regularise their situation, in principle over 10 years. A substantial file is requested from them. The tax consequences in terms of reassessments are often significant. If you receive this letter (look at the top right: it bears the reference 751-SD, and, at the top left, check whether the tax office concerned is a PCRP (pôle de contrôle des revenus et du patrimoine), an income and wealth audit unit), it is highly advisable to seek the assistance of a tax lawyer experienced in such cases, in order to limit the reassessments, and to ensure the quickest and least stressful procedure possible.