France revokes penalties for undeclared overseas accounts
The French tax administration will no longer impose the heavy penalties specified for undeclared foreign bank accounts, following a ruling of the Conseil Constitutionnel.
The judgment leaves unresolved the question of trusts. Trusts with any French connection must also be declared to the authorities, and a penalty of 13% of the assets (or at least 20,000 euros) is imposed for non-disclosure. Perhaps the implication of the Conseil Constitutionnel's 22nd July decision is that that penalty may also be unconstitutional.
However, two experts at UK law firm Herbert Smith have explained that because the decision did not directly refer to trusts, the tax authorities have declined to rescind it for the time being: the French tax administration refuses to draw conclusions from the Conseil Constitutionnel's decision regarding trusts for the time being.
Experts say the decision is, however, 'a positive sign' for any taxpayer who may decide to refer this issue to the Conseil Constitutionnel in the future.
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