A review of tax deadlines and tax issues in France in July 2013
Further information on French tax can be found on our site using this link:
Moving to France
Please note that information given in the articles found here may supersede the relevant sections below.
If you have not filed your relevant returns you may be subject to a 10% penalty and an interest charge of 0.4% per late month. Below is a brief outline of the main deadlines for 2013, most of which have now passed:
17 May 2013: French resident income tax returns (paper) and wealth tax for those with taxable net assets under ?1.3m. Later deadlines were available for online filing. This option is now closed so late forms must be filed in paper format.
17 June 2013: French resident wealth tax returns and payment of liability if taxable assets are over ?1.3m. Non-resident French income tax returns for those with French source income or those with French property and assessed under Article 164c (residents of non-double tax treaty partners territories such as the Channel Islands, Isle of Man etc).
This was also the filing deadline for the annual trust form to be filed by trustees of settlements with French resident parties or French assets.
15 July and 2 September 2013: Wealth tax returns and payments for non-residents with no French source income and living either in the EU or outside (latest date).
Taxpayers who have not included the income arising on their life assurance policies when determining the 2013 wealth tax capping " plafonnement " have until 14 October 2013 to file an amended wealth tax form. No penalties will apply provided the deadline is respected.
As part of the French Government's continued efforts to find financial resources and combat tax fraud, a projet de loi was presented late June. This Regularisation Cazeneuve is a circular on Undeclared Financial Assets held directly or indirectly by French Residents.
At the same time the government issued a circular to all French tax offices to define the conditions in which taxpayers may bring their French tax affairs up to date in relation to previously undeclared accounts and financial assets held outside France directly or indirectly through companies, trusts, foundations or other arrangements. Indeed, French resident taxpayers must report all of their non-French accounts, bonds or life assurance policies when filing their income tax forms. Any omission gives rise to hefty penalties applicable per undeclared account or policy and per year of omission.
The circular particularly targets financial assets held via an entity whether it be onshore or offshore and which remain undeclared. It confirms the application of article 123 bis or minimum income taxation in situations where a person (together with members of the tax household) holds more than 10% shares or rights in an entity. For the minimum taxation rule to apply, the foreign entity must be established in a jurisdiction which offers reduced taxation. This is measured by reference to French taxes otherwise applicable. The minimum rates the authorities propose to apply in these instances are available on our website www.bdo.gg / French Tax Services / French Tax Rates.
There are specific penalties applicable to undeclared life assurance policies. Policies held in trust and now transferred over to the ultimate beneficial owner resident in France as a result of the new trust law published in 2011 may also be targeted.
The circular differentiates between setups created by the French resident taxpayer and those which result from an "inherited" situation. The circular is available on the French Government website www.impots.gouv.fr. Anyone in the above situation where financial assets are held or were held through an offshore or onshore entity, is encouraged to take advice and to prepare their case, since voluntary filing will give rise to lesser penalties. Please refer to www.bdo.gg / French tax / French tax documents to download the list of information and items required to prepare for a spontaneous regularisation. Our French tax team can assist with the procedure and in providing an estimate of any additional liabilities due. The circular specifies that there will be no tax amnesty in these situations.
This article was provided by BDO Limited, formerly PKF (Channel Islands) Limited. For further information, assistance with the preparation of French tax returns or specific advice on the French tax implications of a permanent move to France or French property purchase and structuring, please contact Virginie Deflassieux, Catherine Le Pelley or Kirsty Green at french.tax@bdo.gg, or telephone +44 1481 724561. Alternatively visit their website www.bdo.gg and click on French Tax.
This document has been prepared as a general guide. It is not a substitute for professional advice. Neither BDO Limited nor its directors or employees accept any responsibility for loss or damage incurred as a result of acting or refraining to act upon anything contained in or omitted from this document. BDO Limited, a limited liability company registered in Guernsey, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. BDO Limited does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
French Tax Budget for 2013
French Tax End of Year Summary - December 2012
French Trust Laws and French Tax - November 2012
French Tax Changes in July 2012
Capital Gains Tax in France on Property
Tax in France
French Wealth Tax
Inheritance Tax in France and the Assurance Vie or PCP (Private Client Portfolio Bond)
French Tax Changes in 2011
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