Roche & Cie

End of the flat-rate taxation for non-residents

24 Feb 2016

This risks giving cold sweats to the wealthy life insurances holders. From January 1, financial companies must disclose a range of information about the people who opened life insurance contracts and investments bonds above EUR 7 500. This obligation arises from the Berger-Lefebvre report on financial savings, presented in Article 10 of the Amending Finance Act 2013 and defined by the decree of 30 March 2015.

What does it provides? 

The creation of a national database of life insurance contracts called Ficovie which includes personal data of the subscriber (identity, address, date and place of birth), the details of the contract (amount, policy number, date of subscription, address of the organization account holder) and recipients’ information. Everything is centralized by the Financial Directorate.

A weapon for the tax authorities

Financial companies must update this file by June 15, a date that strangely corresponds to deadline for the wealth tax form (ISF). So far, there were only the good faith of the individuals and the fear of tax audits to encourage them to declare these contracts. The tax is declaratory and no obligation was established.

Now, the tax authorities will not hesitate to cross-check Ficovie’s data with the taxpayer’s returns. Thanks to the European fiscal cooperation, all life insurance policies of neighboring countries like Switzerland or Luxembourg, for example, will also be identified.

Result, the number of persons subject to the ISF (331 000 in 2014) could rise suddenly. According to figures from INSEE, over 280 000 households (1% of households) hold a quarter of 1 588 billion Euros invested in life insurance, which corresponds to an average amount of more than 600 000 Euros, or nearly half of the ISF threshold (set at 1.3 million euros).

Dormant contracts

And woe to those who would minimize the value of their contracts or who would “forget” to declare them.  In case of control, besides the tax due, an increase of 10% to 40% (if forgetting is voluntary) will be applied with the bonus of a penalty of 0.40% per month of delay. “Tax Administration may return three years ago for an amount that would have been undervalued and up to six years if the taxpayer failed to report an account,” says Olivier Rozenfeld, president of Fidroit.

The other interest of Ficovie is to fight against escheat of life insurance contracts where the amount is estimated at over 4.6 billion euros according to the Prudential Control Authority and Resolution. Notaries have now the duty to examine this file during successions and prevent the beneficiaries.


Cabinet Roche & Cie, Chartered Accountant in Lyon, France.
Experts in Non-Residents Taxation.