An article published this morning by Les Echos tells us that "in 2017 and 2018, the French administration received information on more than 3.5 million bank accounts held, directly or indirectly, by French taxpayers in 67 countries". In addition, the amount of information exchanged increased significantly in 2018 (in 2017, "only" 1 million accounts were involved in the exchange of information), partly because the number of countries participating in these exchanges almost doubled between 2017 and 2018.

Among the countries that played the the game of information exchange, there is "land history of tax evasion, such as Switzerland or Luxembourg, but also tax havens regularly pointed out by the community international (Panama, Cayman Islands, Jersey, Guernsey, etc.)".

Many French taxpayers have benefited from the establishment in 2009 of the "cellule de tax disguise", then the mechanism introduced by the Cazeneuve circulars 2013 and 2014 to regularize the assets they held abroad (on bank accounts and/or via intermediary shell companies). Thus, by 37,000 files were processed by the Service de Traitement des Corrective Declarations (STDR), corresponding to approximately 13 billion revenues for the French State.

But there are also many people who had chosen not to regularize and who are worried today, would have with regard, on the one hand, to the rapid development of procedures for the exchange of information, and, on the other hand, at the closure of the STDR since 31 December 2017.

Although the more advantageous system of the Cazeneuve circulars has indeed ended since that date, it is still quite possible to regularise a foreign account and/or assets held via a foreign company.

Reminder of obligations tax and risks in the event of non-compliance

Let us recall that all French tax residents must declare their income and assets French and worldwide.

So, Each year, it must in particular:

1. Declare the existence of your assets foreigners :

• the foreign bank accounts held by him and those on which he has a proxy (one form n° 3916 per account, each year)
• the capitalization contracts or investments of the same nature, including life insurance contracts with foreign-based organizations
• statement the existence of a trust

2) Report annual income related to foreign assets (bank income, land income related to the holding of real estate abroad, etc.).

3) Declare foreign holdings in the ISF (until 2017) or in the IFI (since 2018, if these, of a real estate nature, fall within the scope of this tax, which is for example the case for a second home or for some of them contracts for the capitalisation of shares in real estate)

Foul to meet these obligations, taxpayers are exposed, in the event of tax adjustment, to tax and criminal sanctions with a heavy impact of consequences :

• Tax fines ranging from 1,500 euros per account to 20,000 euros for trusts;
• Income tax and ISF/IFI reminder over 10 years as well as donation / inheritance tax if applicable with surcharges for tax fraud of 80% and interest for late payment, ;
• Possible additional taxation of 60% (in the form of transfer duties) when the origin and the methods of building assets are not justified
• Risk of a criminal penalty of up to €3,000,000 in fines and 7 years' imprisonment.

The regularisation procedure remains possible

The provisions of the Cazeneuve circulars can no longer be applied since January 1, 2018 and the STDR has definitively closed its doors.

However, in the event of spontaneous regularisation, it is still possible to see the increases limited to 40% and to eliminate the criminal risk, without this being the case. automatic. In general, it should be noted that the Administration demonstrates that it tolerance in the event of spontaneous regularisation by taxpayers.

Beyond that, it should be noted that regularization then makes it possible to use savings often and to clean up (and simplify) the situation with a view to a more efficient transmission to future generations.

In In any event, in the event of regularisation, reminders and increases may in principle be the following:

• a fine of 1,500 euros per undeclared account/contract and per non-prescribed year (the current year and the four previous years) or 10,000 euros when the assets are held in a State that has not concluded a convention to combat tax fraud and evasion with France (ETNC) or 20,000 euros in the case of trusts.
• a tax reminder from IR and ISF/IFI on the returns of the last 10 years (or only on the last 3 years if the amount of the assets does not exceed 50,000 euros), as well as donation / inheritance tax if applicable.
• the 80% increase in all tax reminders may - except in special cases - be reduced to 40% as a tolerance measure. Similarly in criminal matters, there is every reason to believe that the administration would not refer the matter to the public prosecutor's office, since spontaneous regularisation could then make it possible to avoid criminal proceedings, except in the case of automatic transmission following the abolition of the "Bercy lock".
• interest on arrears at the rate of 0.40% per month of arrears calculated from 1 July of the year to ¹ January 2018, and 0.20% per month thereafter.

Despite a less effective system attractive since 2018, it is strongly recommended to taxpayers who have not yet still regularized to do so as soon as possible, the general context hardening with recent reaffirmations of the will of the French State the fight against tax fraud and evasion (for example, in the context of the draft finance law) currently under review).

CABINET AUPOIX has significant experience in the regularization of bank accounts and foreign assets. He is therefore able to assist you effectively to prepare and negotiate the best possible regularisation with the Tax Administration, or to assist you in the event of an audit in order to best defend your interests.

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