Roche & Cie

The government toughens penalties for recognized tax evasion

28 Sep 2016

Recently, the Constitutional Council declared the proportional fine of 5% applied by the French tax authorities to taxpayers who hold money on offshore accounts not declared contrary to the Constitution.

Taking note of this statement, Minister Michel Sapin and his advisor Christian Eckert announced that the scale of tax penalties under a tax regularization procedure should be reviewed.

Consequently, and as of September 14, 2016, regularization applications filed by taxpayers will be penalized for deliberate failure (or failure to report under the solidarity tax on wealth) to 25% (formerly 15% ) for the “fraudsters” who received undeclared funds as part of an estate or gift or that set them up when they were not resident in France for tax.

The penalty rate set in other cases (e.g., assets consist of a taxpayer when tax resident in France) from 30% to 35%.