Foreign Bank Accounts: How to Declare Them, What Risks, What Defence?

Summary

• Reporting obligation: every foreign bank account, life insurance policy or fintech account must in principle be declared using form no. 3916-3916-bis, to be filed with the income tax return (end of May / early June depending on the département).
• Fixed penalty: €1,500 per undeclared bank account (€10,000 if the account is held in a State or territory that has not concluded an administrative assistance agreement with France) and €750 per undeclared digital asset account (€1,500 where the value of these accounts exceeds €50,000).
• Tax surcharge: in principle 80% of the additional tax where it relates to income or assets linked to an undeclared foreign account (article 1729-0 A of the French General Tax Code, CGI).
• Tax lawyer: compliance audit, voluntary regularisation, adversarial defense and negotiation of penalties.

What are my tax obligations if I hold a bank account abroad?

• Tax resident? Any person whose tax domicile is in France – for example an impatriate or a former expatriate who has come back to live in France – as well as non-trading companies established in France (a real estate SCI, for example), must in principle report every account opened, held, used or closed outside France. The obligation arises from article 1649 A of the CGI and applies even if the balance is zero or no income was received during the year.

• Accounts concerned: the rule covers traditional banks, neobanks (Revolut, Wise), life insurance policies taken out abroad and digital asset accounts opened with foreign platforms (Binance, Kraken). Online payment accounts (PayPal, for example) are in principle concerned, with an exception for certain accounts used for online purchases or sales, linked to an account opened in France and receiving no more than €10,000 a year.

• Formalities: a separate form 3916-3916-bis is in principle completed for each account, with the online income tax return; it states in particular the institution and its address, the account number, its type, its opening or closing dates and its use (personal, professional or mixed). Box 8UU (8TT for a life insurance policy) of the income tax return is in principle ticked.

• Extended limitation period: where an account has not been reported, the tax authorities in principle have 10 years, instead of 3, to adjust the tax on the income linked to the account (interest, dividends, capital gains), except in particular where the total credit balances of the accounts concerned did not exceed €50,000 at any time during the year.

• Account income: in principle, interest is reported in box 2TR, dividends in box 2DC (or 2TS where they do not qualify for the 40% allowance) and capital gains on digital assets in box 3AN, after form 2047 or 2086 as the case may be. An error on this income may lead to additional tax and penalties, even if the account itself was properly reported.

What are the risks and penalties in the event of an omission or error?

How do you correctly report a bank account held abroad?

1. Listing the accounts, ideally with your lawyer: in principle all accounts are concerned (banks, neobanks, life insurance policies, crypto-asset platforms), including inactive accounts; a power of attorney over an account may also create a reporting obligation, just like being the account holder.

2. Information to gather: for each account, the name and address of the institution, the account number, its type (current account, savings, securities, digital assets, etc.), its opening or closing dates and, where applicable, the power of attorney held.

3. One form per account: each account is in principle the subject of a separate form 3916-3916-bis; the accuracy of the information (country, account number, dates) deserves particular attention, as an error may weaken the declaration.

4. Corresponding income: interest, dividends and capital gains received on these accounts are in principle to be reported in the appropriate boxes of the income tax return, where applicable with form 2047, 2074 or 2086; depending on the applicable tax treaty, a tax credit may avoid double taxation.

5. Keeping supporting documents: it is prudent to keep, in principle for at least 10 years, account opening agreements, statements and transaction histories. In the event of an audit, the burden of proof may lie with the taxpayer, and the absence of supporting documents may have significant consequences.

6. Automatic exchange of information: foreign institutions in principle send the French tax authorities information each year on the accounts of French residents (Common Reporting Standard, or CRS); an undeclared account may thus be detected, sometimes several years later.

7. Meeting the deadline: the online return is in principle to be filed before the end of May - early June (depending on the département).

For detailed instructions, section by section, with a complete example, see the guide form 3916: how to declare a foreign account, step by step.

When money is withdrawn from a life insurance policy taken out abroad, the taxable part, the rates and form 2778 are explained, with worked examples, in the article surrender of a foreign life insurance policy: how France taxes the gains.

How do you regularise an undeclared foreign account before an audit?

• Prior analysis with your lawyer: before taking any step, it is advisable to have your situation analysed by a lawyer, in order to determine the most appropriate course of action.
• Voluntary amended return: depending on the case, it may be appropriate to file corrected forms 3916-3916-bis and 2042 for the years not yet time-barred (in principle up to ten years), together with a letter explaining the origin of the funds and your spontaneous approach. This initiative can help demonstrate your good faith.
• Detailed financial simulation: it is useful to calculate the additional tax, late-payment interest (0.20% per month) and the per-account penalty. This budgetary anticipation can facilitate negotiation with the tax collection department and avoid an aggravating payment default.
• Remission of penalties: depending on the case, a request for discretionary remission (remise gracieuse) of penalties may be made on the basis of article L. 247 of the French Tax Procedure Code (LPF); the tax authorities assess it case by case.
• Payment plan: depending on the case, a payment schedule may be requested from the public accountant, possibly backed by guarantees.
• Role of the lawyer: they analyse the situation, gather the documents, prepare the returns and the explanatory letter, and liaise with the tax authorities.

What I see in my cases

The foreign account cases I handle often involve very high stakes. Several situations come up in my cases:

• Powers of attorney. A person holds a power of attorney over a relative’s account without ever having touched the funds. Yet they end up caught in the tax authorities’ net, are asked to regularise the account, and do not understand why. These cases call for an intelligent presentation of the situation, followed by negotiation.
• Transfers between relatives, common in Asia. Transfers between family members or friends are a widespread practice in Asia. From a French tax perspective, they raise real difficulties: each flow needs to be justified, otherwise it risks being treated as a gift, with very heavy duties. Here again, the way the file is presented and negotiated counts for a great deal.
• Over-reassuring banks. In Portugal in particular, some banks tell their clients that everything is in order, including with regard to France, or open sub-accounts for them without informing them. The French reporting obligation nevertheless remains: these points need to be explained to the tax authorities when regularising.

When the tax authorities question a taxpayer about a foreign account, it is generally because they have received information on significant amounts. The presentation of the file and the negotiation can then, depending on the case, weigh significantly on the final amount, on the tax as well as on the penalties. In my experience to date, every detail of the file matters, because a choice made too quickly can steer the tax authorities towards unfavourable avenues, and no result can be guaranteed. See the page on tax audits of foreign accounts and the article on undeclared accounts in Portugal.

In my cases, an undeclared account is almost always discovered in the same way: through a letter from the tax authorities, which learned of it through the automatic exchange of information. The forgotten accounts are mainly securities accounts, life insurance policies and retirement accounts, in short, the accounts holding a lot of money. 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.

Whether the regularisation is voluntary or follows a request from the tax authorities, I do not see a great difference in treatment, even though the tax authorities may be slightly more lenient in the first case. A regularisation generally takes four to twelve months, depending on the size of the case and the department concerned. The bank statements are generally obtained in the end, sometimes at the cost of many reminders; the real difficulty arises when the account has been closed and the bank, now that the person is no longer a client, is reluctant to provide the documents.

As for dormant accounts or accounts with a low balance, fines are often applied all the same, because that is the law. I therefore build the file from the outset so as to preserve a chance of avoiding them and, if there are any, I negotiate, often successfully.

FAQ

Glossary & checklist

"Used" account: An account on which at least one transaction was recorded during the year.

CRS: Common Reporting Standard; automatic exchange of information on financial accounts between more than 100 States and territories.

3916-3916-bis: Form to be attached to return 2042 for each foreign account.

Checklist: "5 steps to report"

□ List the accounts: banks, neobanks, life insurance policies, crypto-asset platforms

□ Gather the information for each account (institution, number, dates)

□ Complete one form 3916-3916-bis per account and tick box 8UU or 8TT

□ Report the income from the accounts (for example boxes 2TR, 2DC, 3AN)

□ Keep the supporting documents (in principle for at least 10 years)

Further reading

• Full text of article 1649 A of the CGI and BOFiP commentary BOI-CF-CPF-30-20.
• DAC8 Directive: since 1 January 2026, crypto-asset service providers collect information on their customers, which is then sent to the tax authorities of the European Union Member States.