According to a report on 6 November 2013 around 4,000 taxpayers have submitted a voluntary declaration to the country’s Tax Administration over the course of the past four months, to regularize their tax situation. The “influx” of requests followed publication on June 21 of a circular, drafted by the French Budget Minister, detailing the exact conditions governing the treatment of voluntary declarations submitted by French taxpayers with untaxed accounts held abroad.
The annual proportional fine levied in the case of the non-reporting of wealth held abroad is to be capped at 3 percent of the value of assets for active tax evasion and at 1.5 percent for passive tax evasion. In addition to the penalties and fines due, taxpayers will also be required to settle evaded taxes.
Once the Government’s anti-tax evasion law enters into force, however, no such leniency will be shown. The legislation establishes a “tax police” and provides for tough sanctions to be imposed, including a seven-year prison sentence and EUR2m (USD2.6m) fine. It is therefore advantageous to taxpayers to make a voluntary declaration of undeclared income to the tax authorities before the anti-tax evasion law comes into effect.
