Undeclared Revolut, N26, eToro, Wise or Degiro Account: What to Do

It is perfectly legal to open accounts abroad, in particular through online applications such as Revolut, N26, eToro, Wise or Degiro.

They must, however, in principle be declared every year to the tax authorities on form 3916-3916-bis, with box 8UU of return 2042 also ticked.

Where are Revolut, N26, Wise, eToro and Degiro based?

These apps are banks, payment or electronic money institutions, or brokers established in another EU country: that is what in principle makes their accounts accounts opened abroad.

• Revolut: Revolut Bank UAB, a bank licensed in Lithuania (IBAN starting with LT);
• N26: a German bank based in Berlin (IBAN starting with DE);
• Wise: Wise Europe SA, a Belgian electronic money institution (IBAN starting with BE);
• eToro: eToro (Europe) Ltd, an investment firm licensed in Cyprus; crypto-assets held on the platform must also, in principle, be declared on form 3916-bis;
• Degiro: the Dutch branch of flatexDEGIRO Bank, a German bank.

Revolut and N26 now offer French IBANs (starting with FR) to customers living in France. An account held by their French branch is in principle an account opened in France, which does not have to be reported on form 3916. The former account with a foreign IBAN must, however, in principle be declared for each year in which it existed, including the year it was closed or transferred.

What information do these institutions send to the French tax authorities?

The tax authorities do indeed, as a general rule, receive information automatically transmitted by Revolut, N26, eToro, Wise or Degiro.

This is the automatic exchange of information between tax authorities (Common Reporting Standard, CRS).

The information automatically transmitted to the French tax authorities each year is in principle as follows:

• Your name;
• Your address;
• Your country of tax residence (even if merely presumed);
• Your tax identification number(s) issued by your country or countries of tax residence;
• Your place and date of birth;
• Your account number (or substitute account number, identifying the funds you hold);
• The balance of your account or its value as at 31 December of each year during which the account is held;

Since the end of September 2017, France has been a participant, together with some fifty other States at the time of the first exchanges (more than a hundred today), in the system of AUTOMATIC exchange of banking data. All EU Member States are concerned (Directive 2014/107/EU, known as DAC 2), as well as many other States (Switzerland, the United Kingdom, etc.).

In practical terms, the French tax authorities in principle have automatic access to foreign banking information, without having to go through lengthy procedures for the exchange of information with other foreign authorities. The system has therefore become automatic and computerised. It has become simple and fast.

What fines apply if you forgot?

A failure to declare Revolut, N26, eToro, Wise or Degiro accounts may, depending on the case, be regularised.

In principle, the tax authorities may impose a fine of €1,500 per year and per undeclared account, for the years not yet time-barred, generally the last four or five returns (€10,000 per account held in a State or territory that has not concluded with France an administrative assistance agreement giving access to banking information; for a digital asset account, €750 per account, increased to €1,500 if its value exceeds €50,000).

In practice, however, a voluntary declaration of the foreign account, even if late, may in some cases lead the tax authorities to show more leniency regarding these fines.

With regard to an undeclared foreign account, the principle is a 10-year limitation period (reduced to the ordinary limitation period if the total credit balances of the foreign accounts did not exceed €50,000 during the year). A tax lawyer’s analysis is all the more useful when the period at stake is long, as the potential reassessments may then be larger.

How to regularise an undeclared account

It is in principle still possible to regularise the situation voluntarily; whether such a step is appropriate, and how to take it, deserve to be assessed beforehand with a lawyer.

The expression “regularisation of a foreign account” refers to the process by which a taxpayer voluntarily fulfils their tax obligations in order to comply with the legislation in force. To be treated as voluntary, the regularisation in principle takes place on the taxpayer’s own initiative, before a tax audit is initiated: the taxpayer then declares the assets held abroad to the French tax authorities themselves, generally by means of a foreign account regularisation file sent to the tax office.

In practice, a regularisation generally involves four steps, to be adapted to each situation:

1. gathering, for each account, the opening and, where applicable, closing dates, as well as the annual statements, generally downloadable from the app’s customer area;
2. filing the missing 3916 forms (3916-bis for a crypto-asset account): online, by correcting the latest income tax return, and by post or via the secure messaging of the individual tax office (service des impôts des particuliers) for earlier years;
3. declaring, depending on the case, the income generated by the account: interest and dividends (form 2047), capital gains on securities (return 2042 C, with form 2074 if necessary), disposals of crypto-assets (form 2086), through amended returns for past years;
4. keeping evidence of the origin of the sums paid into the account: this is often the first question asked in an audit.

What I see in my cases

When an account of this type is dormant or almost empty, this does not, in my experience, prevent fines: they 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 that there will be none and, if there are, it is possible, in some cases, to negotiate them, with no guarantee of result. Discovery, for its part, almost always comes through a letter from the tax authorities, informed by the automatic exchange of information.

FAQ

Official sources

• impots.gouv.fr - Form no. 3916: declaration by a resident of an account opened outside France (in French)
• BOFiP - BOI-CF-INF-20-10-50: penalties for failure to comply with reporting obligations relating to foreign accounts (in French)
• BOFiP - BOI-INT-AEA-20-40: Common Reporting Standard, reporting obligations of financial institutions (in French)