Tax returns in France: accounts that must be declared to the French tax authorities

The information that must be provided to the French tax authorities includes accounts held abroad (and therefore outside France, from their perspective). Some of our clients who hold accounts in Switzerland or Germany, or who have third-pillar pension schemes, are affected by this. However, it is not always straightforward to know which accounts must be declared as foreign accounts and which do not. As the consequences for the taxpayer can be significant, potentially leading to fines, we offer a brief practical guide to help you with your tax return in France.

Which taxpayers are required to file a tax return in France?

• Any person residing in Switzerland who receives income from French sources: for example, this applies to someone who rents out a property in France and receives income from it.
• Swiss pensioners who have settled in France and receive income from Switzerland
• French residents who are gainfully employed in Switzerland. Provided they are resident in France, workers in Switzerland are required to file a tax return, even if their income is subject to withholding tax, as is the case, for example, for cross-border workers in Geneva or Zurich.

In short, these taxpayers must file a tax return in France, regardless of the canton in which they work (Geneva, Vaud, Neuchâtel, Zurich, Basel, etc.).

French tax law on the declaration of foreign accounts: what you need to know

Any individual resident in France must declare to the French tax authorities, in their tax return, any accounts they hold abroad. This tax return must include accounts that are currently open or in use, as well as those that have been closed during the year.
The accounts concerned are salary accounts, savings accounts and so-called ordinary accounts held outside France, whether they hold cash or securities, in accordance with the Finance Act.
Furthermore, failure to declare such accounts will result in the taxpayer being liable to a fine of €1,500 per undeclared account.

Bank and savings accounts that must (or do not have to) be declared to the French tax authorities

• Salary accounts, savings accounts (regardless of the currency) and securities accounts held with a Swiss bank (Credit Suisse, UBS, Cantonal Bank, PostFinance, etc.): these accounts must be declared to the French tax authorities.
• Bank accounts in France (including digital banks such as ING Direct, Fortuneo, Boursorama, etc.): these accounts do not need to be declared as foreign accounts.
• Foreign bank accounts: Paragraph 2 of Article 1649 of the General Tax Code (‘CGI’) requires the taxpayers concerned to declare any bank accounts opened, held, used or closed abroad (i.e. outside France); Article 344-A of Annex III to the CGI specifies, for the purposes of applying paragraph 2 of Article 1649 of the CGI, that “an account is deemed to be held […] where [the taxpayer concerned] is the account holder, joint account holder, beneficial owner or economic beneficiary”. The reporting obligation for accounts opened abroad does not require the submission of statements for the accounts in question, but rather the details of those accounts, namely the account name, the name of the institution managing the account (including its address), the account number, the account details, and their opening and closing dates.
• The 3rd pillar: regardless of the type of 3rd pillar you hold (bank or insurance-based 3rd pillar A, or 3rd pillar B), this financial product must be declared to the French tax authorities, as it is considered a foreign account.
• Bank accounts with the German bank N26: some b-sharpe clients, particularly those working in the cantons of Basel and Zurich, hold accounts with N26, the German digital bank. N26 accounts must be declared to the French tax authorities as foreign accounts.
• Any.time-style prepaid accounts: the difficulty here lies in determining in which country the institution managing these services is based. This type of provider is somewhat unique in that they are not, strictly speaking, banks. According to the French tax authorities, however, this type of service undoubtedly serves as a substitute for a bank account and can therefore be considered as such. It is therefore necessary – and this is the difficulty – to know in which country the company managing them is based. Often, they are based in other European countries, which allows them to hold a European licence to provide their services, particularly in France. For example, in the case of Any.time, the company is Belgian. Consequently, this type of account must therefore be declared to the French tax authorities as a foreign account.
• PayPal accounts: many taxpayers have PayPal accounts. Here too, a declaration is required, as PayPal, the company that holds the accounts, is based outside France (in Luxembourg).

However, it is not compulsory to register your PayPal account if:

• The PayPal account is linked to an account held in France
• and the PayPal account received less than 10,000 euros during the year
• and the purpose of a PayPal account is to pay for online purchases (or to receive payments from the sale of goods), not to build up savings.

How to declare your foreign bank accounts

For foreign accounts that must be declared in France on your tax return, the procedure is as follows:

• This declaration is made using CERFA form no. 3916 (or by selecting it directly via the online income tax filing service), and the amounts do not need to be specified
• On the tax return, you must also tick box 8UU (and box 8TT for 3rd pillar B and 3rd pillar A insurance)
• For the third pillar, please state the type of policy on a separate sheet of paper or in the comments section, along with the surrender value as at 31 December of the previous year (this information is usually provided by your insurance company)

What should you do if you’ve forgotten to declare an account?

If you have opened an account abroad, have already filed your tax return for the previous year, and have forgotten to declare this account, simply download the CERFA form no. 3916 above, fill it in and send it to the French tax authorities as a supplementary declaration, or use a separate sheet of paper.

To conclude, I hope this article will help you understand clearly which accounts to declare and which not to, and in any case, I can only urge you to be completely transparent with the tax authorities. I wish you all the best with your tax return!

Please note: the information contained in this article should not be construed as tax advice. If you would like further information, we recommend that you contact the tax authorities, a tax specialist or an accountancy firm.