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What exactly do I need to tell the taxman about my assets outside France?

The French tax declaration season is now open, but how much do you really need to tell the French taxman about your affairs outside of France? International tax specialist Jason Porter explains some essential information.

What exactly do I need to tell the taxman about my assets outside France?
Photo by PHILIPPE HUGUEN / AFP)

Tax declarations

Every year, anyone who is resident in France (and some non-residents) must fill out the annual tax declaration. Declarations are now open for 2022 – covering your income from 2021.

If you live in France, it’s almost certain that the tax declaration will be compulsory for you, and if you are non-resident but you have income in France (for example rental income from a French property) you will also need to fill out the declaration.

It’s important to note that if you live in France but all your income comes from abroad (eg a UK or US pension), you still need to fill out the declaration. Find the full details HERE.

But the French tax form only covers my income in France, right?

Wrong. This is the source of much confusion to foreigners in France, but actually you need to tell the French taxman about all your assets.

Most jurisdictions operate on the basis that if you are resident, then you declare your worldwide income, and if you are not resident you only declare the income which is actually sourced in that jurisdiction. If that was it, then you could pay tax twice – eg in the UK and France – on the same income.

The Double Tax Treaty between these two states is designed to eliminate this possibility.  As an example, tax paid in the UK on UK rental income is available as a tax credit against the French tax liability on the same income.

Unfortunately, many UK nationals living in France appear to be under the impression they do not need to declare UK source income in France, as they have already declared it (and paid tax on it) in the UK.  This is not the case – all non-French income still needs to be declared on a French tax return. 

The commonest areas of non-declaration are around UK source rental income, UK bank interest and other UK investment income (dividends, etc., from shares and securities in companies and funds).  

In particular, ISAs are commonly missed off French tax returns. Whilst they have tax efficient status in the UK, in France you would “look through” the ISA vehicle, and declare the underlying dividends, interest and capital gains on your French tax return.

What about bank accounts at home?

The French government has recently taken steps to further strengthen its fight against tax fraud, extending the disclosure regulations to also cover non-active bank accounts.

You must now declare all non-French bank accounts and life insurance policies, even if you have not deposited any funds, earned any interest/gains or made any withdrawals. The penalties for failing to declare a foreign account are the same whether it is active or not (and these can be substantial).

This has now become even more real with the CRS (Common Reporting Standards) exchange of financial information between states.  

We are already seeing evidence of French tax offices calling UK nationals in for interviews to discuss their non-declaration of foreign bank accounts, rental income, and capital gains, based upon information provided by UK financial institutions to the French tax authorities.

What are the recent changes about?

This is all happening at a time of a fundamental change in the basis of taxation in France.  

Most other developed nations introduced a form of “Pay-as-you-Earn” taxation many years ago but in France this came in in 2019.

From January 1st 2019 French tax residents have been subject to a monthly withholding tax on their income for that year.  

So do I still have to do the declaration if I am taxed at source?

Yes, for the moment anyway.

This is set to change in the future, but at present most employees still have to complete the declaration – the exception is certain groups whose circumstances have not changed since their 2021 declaration. If this is you, you will have been contacted directly by the tax office, if you have not received a notification you still need to do the declaration. 

When do I need to pay up by?

Tax declarations opened online earlier in April with the deadlines varying depending on where you live in France.

READ ALSO The French tax calendar for 2022 

Any balance of tax due must be settled by the end of the year (penalties will apply for non-payment). Or, where applicable, the tax authorities will refund any overpayment.

If you are an employee and you’ve already had your income taxed at source, you might actually get money back from the taxman if you qualify for any tax breaks or rebates – more details on those here.

Jason Porter is Business Development Director of Blevins Franks Financial Management Ltd.

For more information on the French tax declaration, how to fill in the form and where to find professional help if you need it, head to our tax section HERE.

Member comments

  1. This article was posted two years ago. Is there an update for the 2020 tax declaration?
    Nigel Stubbs

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QUALITY OF LIFE

Survey shows that strong majority of the French are ‘happy’

Their international reputation inclines more towards the grumpy, but the latest national mood survey shows that most French people are 'happy' and a significant amount are even 'very happy'.

Survey shows that strong majority of the French are 'happy'

The study by the Elabe Institute showed that 68 percent of respondents said they were happy, and a third (32 percent) even said they were “very happy” – despite serious concerns about the rising cost of living and the climate crisis.

While these figures are down on the 2021 study, which showed 11 percent more French people responding that they were “happy” and seven percent more saying they were “very happy,” it is safe to say that the French population is still quite content.

However, the survey did show some differences when considering certain factors.

READ MORE: MAP: Where are the happiest areas of France?

Income level

81 percent of people who “make ends meet without financial restrictions” reported being happy, while only 54 percent who experience financial restrictions said they were happy.

The same was true within companies – executives and heads of organisations were much more likely to say they were happy (87 percent) than their subordinates.

Political preferences

When looking at how French people voted – 77 percent of the people who supported President Emmanuel Macron in the first round of the presidential election responded that “things are going well” when asked in the survey their personal situation.

This is higher than both people who voted further to the political Left and Right. As for those who supported Left-wing Jean-Luc Mélenchon in the first round, 63 percent said “things are going well.” This number was even lower for first-round supporters of Marine Le Pen – only 58 percent said “things are going well.”

Inflation and climate change

Almost all the people surveyed (91 percent) said they were concerned about a loss of household purchasing power due to inflation in the coming months.

And the French mood has dropped since October 2021, when the last survey was conducted. Overall, respondents feel less confident than they did last year (-4 percent), less “serenity” (-5 percent) and less satisfaction (-7 percent). 

People also feel generally more weary, nostalgic, sad, angry, and fearful than they did in 2021.

Many are particularly concerned about how global issues like the climate crisis and inflation could impact their daily lives. 89 percent reported being worried that their day-to-day life will deteriorate as a result of price increases, and 85 percent reported being afraid of the consequences of climate change (eg flooding, natural disasters, and drought).

A large number of French people (74 percent) also said that they worry about their health deteriorating due to pollution and environmental problems.

Other surveys echo these results, showing an increase in concern over climatic events in France, particularly since the summer of 2022, which was marked by three significant heatwaves, forest fires, and widespread drought.

READ MORE: France records 10,000 excess deaths in second hottest summer on record

A poll published in August by Odoxa showed that seven out of ten French people “fear being personally affected by a climatic hazard.”

Of those feeling climate-anxious, age played a role, with 81 percent of those under 25 responding that they are personally afraid, in comparison of 62 percent of those aged over 65. 

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