French resident: an undeclared bank account

In France, regulations (Article 1649 A of the General Tax Code) require all tax residents to declare annually any bank accounts they hold abroad, whether active or not. This obligation, governed by the General Tax Code, aims to strengthen transparency and combat tax fraud. It applies to any individual who is tax-resident in France and concerns accounts opened, used, or closed during the previous year.

Which bank accounts are concerned?

All types of accounts are covered: current accounts, savings accounts, securities accounts, as well as those accessible through online platforms such as Revolut or Wise, provided that their IBAN is not French. Joint accounts, accounts held jointly, or accounts managed under power of attorney must also be reported. The obligation concerns the very existence of the account, regardless of its balance or the income it generates. Thus, an empty or inactive account is not exempt from this rule.

How do you declare a bank account located abroad?

The declaration is made using Cerfa form no. 3916, attached to the annual income tax return for accounts used abroad. Failing to do so exposes you to automatic penalties: a fine of €1,500 per undeclared account per year, rising to €10,000 if the account is located in a non-cooperative state or territory listed on an official list. In the event of proven fraud, additional penalties, such as an 80% surcharge, may be imposed. This requirement is part of a context of automatic exchange of banking information between countries, enabled by international agreements. The tax authorities therefore have tools to detect undeclared accounts. To avoid complications, particularly during an audit or inheritance proceedings, voluntary disclosure is recommended under the provisions of Article 1649 A. With the assistance of an adviser if necessary, it helps limit the risks and ensure compliance with the law.

Why must you declare a bank account abroad?

When it comes to undeclared foreign accounts, one essential point is often overlooked: the impression this leaves on the tax authorities. A lack of transparency, even if unintentional, systematically attracts attention. Whether it is an old forgotten account or a small amount, the effect remains the same: there is an obligation to declare accounts opened internationally. What are the risks associated with failing to declare accounts opened abroad? First, tax authorities now have access to a vast amount of information about taxpayers through automatic exchange systems with foreign banks. Second, an account kept undisclosed may raise doubts about unreported income, such as interest or investment gains. Worse still, this can undermine the taxpayer’s credibility in the eyes of the authorities, especially if the account holder fails to declare accounts opened abroad. Once this doubt has been raised, everything is closely scrutinized: previous financial transactions, consistency with the declared tax residence, and how the assets are held. What may have seemed like a simple omission can then have serious consequences: a penalty of up to 80% for suspected fraud, flat-rate taxation on transfers of wealth, or even suspicions of money laundering in the event of unexplained transactions.

The importance of transparency with the tax authorities

Taking proactive steps to regularize the situation is often the best option. This not only helps limit the risks but also restores a transparent relationship with the tax authorities.

Must you declare a bank account even if it has no activity?

Having a bank account open abroad, even if it has no activity, requires a declaration. The answer leaves no room for doubt: yes, it is mandatory. In France, anyone who is tax-resident in the country must report the existence of their bank accounts located outside France every year. This includes accounts opened, used, or closed during the year, whether current accounts, savings accounts, securities accounts, or even digital accounts such as Revolut or Wise, PayPal accounts, provided that their IBAN is not French. This also applies to joint accounts, accounts managed under power of attorney, or accounts held jointly. What matters here is the existence of the account, regardless of its balance or the income it generates. Neglecting this step, even for a dormant account, can have serious repercussions. As stated above, the penalty is €1,500 per account per year, rising to €10,000 if the account is domiciled in a country deemed non-cooperative. This penalty applies automatically, without any need to prove an intention to commit fraud.