Article 1649 A of the French Tax Code requires every individual with tax domicile in France — as well as certain associations and non-commercial companies — to report each year the accounts opened, held, used or closed abroad. A separate obligation is set out in article 1649 AA of the Tax Code for life-insurance policies (and capitalisation contracts) taken out abroad; certain digital-asset accounts fall under article 1649 bis C. Failure to report is penalised by the fixed fine of article 1736, IV of the Tax Code: €1,500 per unreported account (raised to €10,000 where the account is held in a State or territory that has not concluded an administrative-assistance treaty with France), and €150 per omission or inaccuracy (capped at €10,000 per return). Article L.169, paragraph 5 of the Book of Tax Procedures extends the tax authority's reassessment period to 10 years, but only where the balance of the unreported account exceeds €50,000 at any point during the year concerned (threshold introduced by the 2019 Finance Act, art. 8); otherwise, the ordinary period applies. The cost of a late regularisation can therefore be considerable.
Article 1649 A of the Tax Code is one of the pillars of the French anti-fraud framework — complemented by article 1649 AA for life-insurance policies taken out abroad. The annual reporting of foreign accounts (form 3916 for accounts, 3916-bis for life-insurance policies, filed as a schedule to the 2042 return) is mandatory for every individual with tax domicile in France, as soon as they hold, use or have power of attorney over an account outside France — even where the account is held by a third party (relative, spouse) and the taxpayer is merely a user.
The cost of a breach is far from trivial. The fixed fine of article 1736, IV of the Tax Code (€1,500 per unreported account, raised to €10,000 where the account is located in a State that has not concluded an administrative-assistance treaty; €150 per omission or inaccuracy, capped at €10,000 per return) applies per account and per year not reported. Across assets spread over several accounts held for years, the total can reach tens of thousands of euros. And the reassessment period extended to 10 years (Book of Tax Procedures art. L.169, para. 5) — where the balance of the unreported account exceeds €50,000 at any point during the year (2019 Finance Act threshold, art. 8) — allows the authority to look back a long way.
The firm assists taxpayers in the course of regularisation (voluntary preventive procedure) and defends taxpayers in litigation facing post-audit reassessment proposals.
The obligation covers every account opened, held, used or closed outside France during the year — including accounts used without being the holder (power of attorney, authorised signature). Administrative doctrine and case law have confirmed a broad reading: an account used even occasionally must be reported.
Individuals with tax domicile in France within the meaning of article 4 B of the Tax Code. But also: associations and non-commercial companies not subject to corporate income tax and having their registered office in France. Companies subject to corporate income tax are not absolutely exempt: they fall within the scope of the obligation where the foreign account benefits an individual (for example an account opened in the company's name but used by a director or a beneficial owner) — caution is required in structures where beneficial-owner characterisation is ambiguous.
The obligation has been progressively extended. Life-insurance policies (and capitalisation contracts) taken out outside France fall under article 1649 AA of the Tax Code (form 3916-bis since 2014) — a provision distinct from art. 1649 A applicable to bank accounts. Digital-asset accounts (cryptocurrencies) held with foreign platforms are subject to art. 1649 bis C since 2019, with a separate penalty regime (Tax Code art. 1736, X: €750 per wallet or €125 per omission, raised to €1,500 / €250 where value > €50,000). For foreign bank accounts and life-insurance policies, however, it is art. 1736, IV that applies (€1,500 / €10,000 / €150).
Fine of article 1736, IV: €1,500 per unreported account (€10,000 where the account is located in a State or territory that has not concluded an administrative-assistance treaty with France; €150 per omission or inaccuracy, up to €10,000 per return). Reassessment period extended to 10 years (Book of Tax Procedures L.169, para. 5) only where the balance of the unreported account exceeds €50,000 at any point during the year (2019 Finance Act threshold, art. 8) — failing which, the ordinary period applies. Where assets are held undeclared abroad, the specific 80% surcharge of art. 1729-0 A of the Tax Code may apply, to be distinguished from the 40% surcharge for deliberate breach (art. 1729, a) and the 80% surcharge for fraudulent manoeuvres or abuse of law (art. 1729, b and c). These regimes coexist but are distinct.
Voluntary regularisation — before any audit — is the most protective option. Although the regularisation unit (STDR) was disbanded in 2018, regularisation remains possible with the taxpayer's local tax office (SIP). Penalties may be negotiated (reduction of surcharges) where good faith is established and cooperation is shown. See our dedicated page on the regularisation of foreign accounts.
The firm regularly conducts voluntary regularisations for taxpayers who have accumulated unreported foreign accounts over several years (international inheritances, historical structuring, past expatriations). Our methodology: a full audit of positions, calculation of the tax impact and potential fines, filing of the amended return with explanatory support, and negotiation of penalties where appropriate.
In the event of an audit opened by the authority (request for clarification, reassessment proposal), we build the defence on the grounds of characterisation, reassessment period and mitigation of penalties.
Every individual with tax domicile in France within the meaning of article 4 B of the Tax Code, as well as associations and non-commercial companies not subject to corporate income tax and having their registered office in France. The report is filed as a schedule to the 2042 return via form 3916 (and 3916-bis for foreign life-insurance policies).
Every account opened, held, used or closed during the year outside France: current account, savings account, securities account, corporate bank account of which you are a signatory, digital-asset account (crypto), foreign life-insurance policy. Case law takes a broad reading: an account merely used (without being the holder) must be reported.
Fixed fine under article 1736, IV of the Tax Code: €1,500 per unreported account and per year — raised to €10,000 where the account is held in a State or territory that has not concluded an administrative-assistance treaty with France. A fine of €150 also applies per omission or inaccuracy in the report (capped at €10,000 per return). To this may be added the reassessment period extended to 10 years (Book of Tax Procedures L.169, para. 5) — subject to the threshold condition (see below) — on the income of the unreported account, with late-payment interest and, where applicable, a 40% surcharge (deliberate breach, art. 1729, a) or the 80% surcharge specific to assets held undeclared abroad (art. 1729-0 A).
Not systematically. Article L.169, paragraph 5 of the Book of Tax Procedures extends the period to 10 years in the event of a breach of the reporting obligation of art. 1649 A, but only where the balance of the unreported account exceeds €50,000 at any point during the year concerned (threshold introduced by the 2019 Finance Act, art. 8). Below that threshold, the ordinary period (3 years) applies. Where the threshold is crossed, the extension to 10 years allows the authority to reach back over 10 unbarred years — which can represent considerable sums if the account generates income (interest, capital gains, dividends) that has not been reported.
Yes. Voluntary regularisation remains possible — although the dedicated unit (STDR) was disbanded in 2018. It is carried out with the local tax office (SIP) with a complete file: identification of the accounts, calculation of the unreported income and assets, and amended returns. Good faith and cooperation make it possible to negotiate a mitigation of penalties. It is almost always vastly less costly than waiting for an audit.
The heirs of a deceased person with tax domicile in France who held unreported foreign accounts inherit the reporting obligation for the years prior to death, within the limitation period. A voluntary preventive regularisation is strongly recommended — the authority now cross-checks inheritance declarations against automatic exchanges of information (CRS, FATCA).
General framework: minimum rate, social levies, tax treaties.
Voir la page Foreign accountsVoluntary regularisation procedure and negotiation of penalties.
Voir la page Foreign accountsConseil d'État clarifications on the scope of application.
Voir la page WealthDetermining tax residence (Tax Code art. 4 A and 4 B).
Voir la pageA confidential initial consultation to audit your situation, organise a voluntary regularisation or defend your interests in the event of an audit.
© BENSAID Avocats — The information on this site does not constitute legal advice and cannot replace a personalised tax analysis.