More and more people are being mistaken for overseas bank accounts

Increasing rates of information exchange between countries means that more people are trapped in undeclared foreign bank accounts and other “accounts” deemed equivalent.

A system for the automatic exchange of banking and financial information between countries belonging to the group of developed economies of the OECD was set up in 2017.

At the end of the same year, France closed a temporary service aimed specifically at allowing people to spontaneously hold undeclared accounts in order to have lighter sanctions.

Now, “countries are starting to know how to use this data so we have entered a new era”, according to a specialist quoted by Le Figaro.

Financial lawyer Corinne Dadi, of Everlaw Tax, told the media: “The letters from the IRS are becoming more frequent and relate to people who have missed the regularization service.”

Many people have understood in recent years the need to declare such accounts: while only 327,000 households declared one in 2017, there were more than a million in 2020.

Which accounts must be declared?

The declaration of foreign accounts refers to the declaration of their existence on the online section or the paper form 3916. It does not refer to the declaration of the profits that they could generate (these must be declared but in other sections tax return).

The help notes for the section/form say the accounts in question are the ones that “usually take deposits”, but a financial expert who works with the English-speaking community said it was safer to declare all accounts able to hold money. .

This includes, for example, bank and neo-bank accounts. People are also required to declare cryptocurrency accounts as well as overseas life insurance and similar investment policies.

During the online reporting process this year, a note refers to “PayPal and Transferwise type accounts” as one of the types that may be affected.

However, accounts do not have to be reported if they are backed by (linked to) a French bank account, are used for online purchases or to deposit money from the sale of goods online, and in the latter case you do not deposit more than €10,000 per year on the account linked to it.

Penalties

If you have not declared an account or accounts abroad, it is advisable to do so because the tax offices can take into account real errors.

Failing this, the penalties for non-declaration are €1,500 per account for bank and similar accounts and for investment policies (€10,000 for accounts in certain countries with which France does not have a evasion) or €750 for cryptocurrency accounts if the value is less than €50,000.

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