Foreign accounts: the most common omissions and the right reflexes to put things right

Yet French tax residents must report, together with their annual income tax return, the accounts they have opened, held, used or closed abroad. This obligation may apply even where the account is dormant, holds little money or has generated no income.

The applicable rules, in brief

Article 1649 A of the French General Tax Code (CGI) requires individuals who are tax-resident in France to report the details of accounts opened, held, used or closed abroad.

Since 2019, merely holding a foreign account can be enough, even where there has been no movement during the year. The return must also mention an account closed during the year, including where it no longer exists on the filing date.

The obligation covers in particular:

• bank accounts and savings accounts;
• payment accounts or multi-currency accounts;
• securities accounts and cash accounts opened with foreign brokers;
• certain capitalisation contracts, life insurance contracts and similar investments taken out outside France;
• digital-asset accounts opened with foreign entities.

The return is filed using the single form no. 3916-3916 bis, attached to the annual income tax return. In principle, a separate return must be prepared for each legally distinct account or contract.

Reporting the account does not replace reporting the corresponding income. Interest, dividends, capital gains, pensions or other foreign-source income must be reported separately in the appropriate sections and forms, in particular return no. 2047 where required.

1. Neobanks, payment institutions, brokers and investment platforms

Checks frequently concern accounts held with neobanks, payment institutions and brokers such as:

• Wise, Revolut, N26, bunq or Monese;
• Interactive Brokers, DEGIRO, Trade Republic, eToro, Trading 212 or Freedom24;
• Swissquote or Saxo, depending on the entity actually used;
• savings accounts, money-market funds, robo-advisors and cash accounts accessible from a banking or investment app.

This list is not exhaustive. Above all, the platform's commercial name is not, on its own, enough to conclude that an account is French or foreign.

For each product, the following should be checked:

• the legal entity shown on the statement or contract;
• the country in which that entity is established;
• the account number or identifier;
• the IBAN and BIC, where they exist;
• the opening date and, where applicable, the closing date;
• the existence of a cash account separate from the securities account;
• any migrations to another entity or a new IBAN.

The IBAN prefix: a useful clue, but not always sufficient

An IBAN beginning with DE, BE, LT, IE or another foreign prefix is generally a strong indication that the account is located outside France.

Conversely, an IBAN beginning with FR is, in principle, an indication that the bank account or cash account concerned is domiciled in France. It does not, however, necessarily mean that every product accessible from the same app is also held in France.

A single app may thus include:

• a French current account;
• a securities account held by a foreign entity;
• a foreign money-market fund;
• a digital-asset account held in another State.

The contractual terms and the statements specific to each product must therefore be consulted.

Wise: think account by account and country by country

Wise lets you hold several currencies and obtain different local or international account details depending on the currency. Wise's documents mention, in particular, euro details in Belgium, pound-sterling details in the United Kingdom and, depending on the services activated, details in other countries.

In practice, the individualised account details should be listed country by country:

• one set of details located in Belgium;
• another located in the United Kingdom;
• another possibly located in the United States, Australia or another country.

A separate return should be considered for each individualised account located in a different country. On the other hand, several currencies accessible through the same account details do not necessarily amount to several accounts to be reported.

To identify the correct perimeter, the taxpayer should open each balance in the app and note the account number, the entity, the address and the country shown in the receiving details.

Revolut: in principle a French IBAN for the main account, but foreign products

Clients who opened their account after the launch of the French branch automatically receive a French IBAN. Former clients holding a Lithuanian IBAN may be transferred to the French entity, their new FR IBAN becoming the account's main identifier.

A French client's main current account is therefore, in principle, assigned a French IBAN. That does not, however, remove the need to check the other services activated in the app. Revolut indicates in particular that:

• euro accounts with an FR IBAN and savings accounts are held by its French branch;
• brokerage accounts, flexible money-market funds, shares, ETFs, bonds, robo-advisor and CFDs are held by an entity located in Lithuania;
• certain commodity products come under a UK entity;
• digital-asset accounts come under an entity located in Cyprus.

Revolut states that a user holding several products with foreign entities may have several separate accounts to report, even if their main current account has a French IBAN.

N26: distinguish the bank account from the investment account

N26 indicates that a bank account with an IBAN beginning with DE must be reported in France using form no. 3916. The platform also states that activating its Stocks and ETFs offering leads to the opening of a securities account with Upvest Securities GmbH, a provider established in Germany. This investment account must be examined separately from the main bank account.

Trade Republic: a French IBAN since 9 January 2025 for new clients

Trade Republic indicates that all new clients in France have received a French IBAN since 9 January 2025. Longer-standing French clients can also activate this French IBAN. As a result:

• new clients in principle have a cash account with an FR IBAN;
• long-standing clients may previously have had a German IBAN;
• in the event of a migration, one must check whether the former foreign account was legally closed;
• where applicable, the former account must be reported one last time for the year of its closure;
• the location of the securities account and of the other products must nonetheless be checked in the contractual documents.

An FR IBAN should therefore not lead you to automatically rule out any reporting obligation without examining the various accounts linked to the service.

Interactive Brokers, DEGIRO and other brokers

For Interactive Brokers, the contracting entity may in particular be an entity located in Ireland or, for older accounts, in the United Kingdom. The PEA offered to French residents is presented on the Interactive Brokers Ireland website. The French nature of the tax wrapper therefore does not necessarily mean that the account is held in France.

DEGIRO, for its part, states that its securities account does not necessarily have a single bank number, whereas a personal cash account with an IBAN is opened to hold uninvested cash. Both must therefore be identified from the statements and contractual documents.

The same method must be applied to accounts held with eToro, Trading 212, Freedom24, Swissquote, Saxo or any other broker:

• identify the contracting entity;
• locate the securities account and the cash account;
• record their respective references;
• check for any migrations;
• distinguish reporting the accounts from reporting the income and capital gains.

The provision of an annual tax statement (IFU), a tax report or an annual statement does not, on its own, remove the need to check whether the account is held abroad. Likewise, the transmission of information by the institution under the automatic exchange of information, in particular the CRS, does not replace the taxpayer's own return.

2. Employee share ownership and foreign pension plans

Accounts opened by the employer

An international employer may open, in an employee's name, an account intended to receive:

• free shares;
• restricted stock units, or RSUs;
• stock options;
• shares acquired under an employee share ownership plan;
• the proceeds of the sale of those shares.

Such accounts may be administered in particular by Fidelity, Morgan Stanley or E*Trade, Computershare, Shareworks, Equiniti, Goldman Sachs, UBS or another foreign account keeper.

The fact that the employee did not personally request the opening of the account, or never funded it, is not enough to exclude the reporting obligation.

A single share plan may also lead to the successive opening of several accounts with different keepers. The account numbers, together with the opening, migration and closing dates, must then be reconstructed.

It is also necessary to distinguish:

• reporting the existence of the foreign account;
• the taxation of the acquisition gain arising from free shares, RSUs or stock options;
• the taxation of the capital gain or loss realised on the sale;
• reporting foreign dividends and the corresponding withholding taxes.

Certain foreign pension plans

Certain foreign retirement arrangements must also be identified, in particular workplace pensions, UK SIPPs, US IRAs and other individual retirement plans.

Not all of them are automatically reportable in the same way. The arrangements that may be concerned include those taking the form of:

• an individual financial account held abroad;
• a contract taken out with a foreign insurer;
• a capitalisation contract or similar investment;
• a plan granting the holder individualised rights over financial assets.

Article 1649 AA of the CGI covers capitalisation contracts, similar investments and life insurance contracts taken out with bodies established outside France. Their characterisation must be checked from the contract, the manager and the plan's exit terms.

Any reporting of the underlying vehicle must be distinguished from the reporting of the pensions or capital paid out, the treatment of which depends on their nature and on the applicable tax treaty.

3. Digital-asset accounts

Digital-asset accounts opened, held, used or closed with an entity established outside France are subject to a specific reporting obligation set out in article 1649 bis C of the CGI, using form no. 3916-3916 bis.

The accounts likely to be concerned include those opened on foreign platforms allowing:

• the purchase or sale of crypto-assets;
• their custody;
• exchanges between different digital assets;
• or their conversion into legal-tender currency.

The analysis must focus on the legal entity with which the taxpayer contracted, and not solely on the platform's commercial brand. A platform may also offer several products belonging to different entities. Revolut indicates, for example, that its digital-asset accounts are held by an entity located in Cyprus, distinct from its French banking branch and its Lithuanian investment entity.

Reporting the digital-asset account is independent of reporting taxable transactions. The taxpayer must therefore check separately:

• the existence of the foreign account;
• taxable disposals of digital assets;
• exchange or payment transactions that may constitute a taxable event;
• any income from staking, lending or other mechanisms, depending on its characterisation.

What penalties apply in the event of an omission?

The penalties differ according to the nature of the account or contract omitted.

Bank, payment and securities accounts (article 1649 A)

Failure to report is penalised, pursuant to article 1736, IV of the CGI, by a fine of:

• 1,500 euros per account and per non-time-barred year;
• 10,000 euros per account and per year where the account is located in a State or territory that does not meet the administrative-assistance conditions laid down by the legislation.

Life insurance and capitalisation contracts taken out abroad (article 1649 AA)

Failure to report is penalised, pursuant to article 1766 of the CGI, by a fine of:

• 1,500 euros per undeclared contract;
• 10,000 euros per contract where the body is established in a State or territory that does not meet the administrative-assistance conditions.

Digital-asset accounts (article 1649 bis C)

Failure to report follows a separate regime, set out in article 1736, X of the CGI:

• 750 euros per undeclared account, or 125 euros per omission or inaccuracy;
• amounts raised to 1,500 euros and 250 euros respectively where the market value of the digital-asset accounts exceeded 50,000 euros at any time during the year concerned;
• the total of the fines being capped at 10,000 euros per return.

In every case, the fine may apply even if the account or contract:

• recorded no transaction;
• shows a low or nil balance;
• produced no income;
• was opened by an employer;
• or was closed during the year.

Where income, gains or capital gains were also omitted, additional tax, late-payment interest (article 1727 of the CGI) and surcharges may be added. In particular, tax reassessments relating to undeclared assets held abroad may carry the 80% surcharge provided for in article 1729-0 A of the CGI, which is separate from the flat-rate fines set out above.

How to regularise undeclared foreign accounts?

Where an omission is identified, it is not enough simply to add the account to the next annual return. A full regularisation generally requires:

• 1. Listing the accounts and contracts concerned, including dormant or closed accounts, accounts opened by an employer or those linked to a secondary feature of an app.
• 2. Identifying the managing entity, its country, the account number and its opening and closing dates.
• 3. Gathering the supporting documents, in particular contracts, opening confirmations, annual statements, transaction reports and migration notices.
• 4. Reconstructing the years concerned, taking into account French tax residence and the applicable recovery period. Where accounts, contracts or digital assets have not been reported, the authorities in principle have an extended ten-year right of recovery (article L. 169 of the Book of Tax Procedures), except where the combined balances of the accounts concerned have remained below 50,000 euros, in which case the ordinary recovery period applies.
• 5. Distinguishing the reporting omission from the income omission.
• 6. Filing the missing forms no. 3916-3916 bis and, if necessary, amended income tax returns.
• 7. Reporting the corresponding foreign income and gains, in particular interest, dividends, capital gains, pensions or digital-asset transactions.
• 8. Presenting an explanatory letter setting out the origin of the accounts, the circumstances of the omission, the steps taken and any difficulties encountered in obtaining the historical documents.

A voluntary, consistent and documented approach makes it possible to present the situation clearly to the authorities. It does not guarantee the absence of penalties, but it can support a request for reduction taking into account good faith, the circumstances of the case and the completeness of the regularisation.

How can the firm assist taxpayers?

Our work may include, in particular:

• reviewing the apps, statements and contractual documents;
• identifying legally distinct accounts and contracts;
• analysing their characterisation under articles 1649 A, 1649 AA and 1649 bis C of the CGI, as well as the applicable penalty regime (articles 1736, IV, 1766 and 1736, X of the CGI);
• reconstructing the opening, migration and closing dates;
• determining the years to be regularised, in light of the applicable recovery period;
• reviewing the interest, dividends, capital gains, pensions and income attached to the accounts;
• preparing forms no. 3916-3916 bis and amended returns;
• drafting the regularisation letter;
• dealing with the tax authorities and, where appropriate, presenting a request for the reduction of penalties.

Conclusion

The proliferation of neobanks, multi-currency accounts, online brokers, employee share plans and crypto-asset platforms makes reporting foreign assets more complex.

The right reflex is not to reason by brand or by app alone. Each legally distinct account or contract must be identified, together with its managing entity, its country of holding and its opening or closing dates.

The existence of a French IBAN is an important clue, but it is not always sufficient where the app gives access to other products held abroad. Likewise, reporting the account never removes the need to examine the income, gains or capital gains attached to it.

Donoé assists private individuals, company directors and international families in identifying their foreign assets, reporting the corresponding income and carrying out regularisation procedures with the tax authorities.