Income tax: inactive foreign bank accounts must also be declared
The declaration of foreign bank accounts must be made at the same time as the taxpayer’s annual tax return. Failure to comply with this declaration obligation may result in a fine of 1,500 euros per undeclared account, which may be increased to 10,000 euros in certain circumstances. Moreover, such a failure to declare has the effect of extending the time limit that the administration has to recover income tax from three to ten years, regardless of the balance of the account(s) concerned.
Prior to the introduction of the law of 2018 concerning the fight against fraud, this reporting obligation only applied to bank accounts “opened, used or closed abroad”. A bank account abroad that only recorded interest on the sums deposited and the payment of bank charges was therefore exempt from the obligation because it could not be considered as “used”.
The anti-fraud act extended the scope of the reporting obligation to accounts “held abroad” by the taxpayer. The scope of the obligation is thus no longer restricted to “used” accounts, i.e. active accounts, but now includes inactive or dormant accounts that were previously excluded.
From May 2019, holders, co-holders or beneficial owners of a foreign bank account will have to comply with the reporting obligation, even in the absence of any active credit or debit transactions carried out on this account in 2018.
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