Is it illegal to own a bank account abroad ?

14 March 2022

What happens if you have a bank account abroad?

In recent years, the exchange of information between states has increased considerably. Among the data exchanged are in particular those relating to bank accounts held outside the state of residence of the taxpayers concerned. Holding a bank account abroad is not in itself illegal: it is possible to invest money outside France, under certain conditions.

Foreign bank account: What should be declared?

Article 1649 A of the French General Tax Code (CGI) requires individuals, associations and non-trading companies to declare a foreign account. These provisions apply only to persons domiciled in France. This declaration is annual and is made at the same time as the declaration of income or results.

In a specific form, the persons in this situation must indicate the banking organization sheltering their assets abroad and their account number. The taxpayer is also required to inform the tax authorities of any profits from a foreign account (interest, financial movements, etc.). The taxpayer will then be taxed in France taking into account the totality of his situation.

What are the penalties for not declaring?

If you do not declare one of your foreign accounts, you risk a fine of €1,500 per undeclared account. If the account is located in a country that has not signed an agreement with France to combat tax evasion and avoidance, the fine will be €10,000 per undeclared account. The list of States or territories having concluded such a convention is available at BOI-ANNX-000270

Is an adjustment possible without a penalty?

The regularization of a foreign account consists in bringing the taxpayer into compliance with his tax obligations. Thus, it is a procedure of spontaneous regularization by the taxpayer of the account and the assets he holds abroad. The regularization of foreign accounts is subject to a statute of limitations that can go up to 10 years (3 years if the total amount of credit balances is less than 50,000 €). Indeed, the regularization of foreign accounts can only relate to years that are not subject to a statute of limitations.Until the end of 2017, individual taxpayers who are French tax residents were able to benefit from a favorable regularization procedure, under the so-called “Cazeneuve” circular of June 21, 2013, which has been amended on several occasions.

Since January 1, 2018, the provisions of this circular are no longer applicable. Individual taxpayers wishing to regularize their situation are therefore now subject to ordinary law, without any favorable derogatory regime being invoked.

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