The President of the Swiss Bankers Association (SBA), has suggested that France should extend and enhance its tax regularization facility to allow more taxpayers to make a voluntary declaration to normalize their tax affairs.
At the moment the program is unattractive for many clients as it is too costly, complicated, and lacking in legal certainty. Odier said the SBA would seek to launch discussions with French tax authorities to improve what is on offer. Changes must be implemented swiftly, however, as Switzerland has agreed to apply automatic exchange of information (AEI) in two to three years’ time, he said. Swiss banking clients will soon have to decide whether to regularize or relocate their untaxed assets, he explained.
France set out the conditions for its tax regularization program in a June 2013 circular. The tax penalty rates are lowered for voluntary declarations of non-tax compliance, from 40 percent (imposed in the event of a non-declaration) to 30 percent for so-called “active” fraudsters, and to 15 percent for “passive” offenders, including for example heirs with unreported assets located abroad. Meanwhile, the annual proportional fine levied in the case of non-reporting is capped at 3 percent of the value of assets for cases of ‘active’ tax evasion and at 1.5 percent for ‘passive’ tax evasion cases. These concessionary penalty rates are conditional on the taxpayer settling the outstanding tax due in full.
