French Voluntary Disclosure Lawyer: Foreign Accounts, Life Insurance, Trusts and Structures
Alphard Law assists taxpayers holding bank accounts, life insurance policies, companies or trusts outside France in two mirror situations: voluntary disclosure, before any move by the French tax authority, and defence once the authority has written, notably under Article L. 23 C of the French Tax Procedure Code. Since the generalisation of automatic exchange of information, the question is no longer whether an undeclared foreign asset will become known to the French tax authority, but when, and in which position, chosen or suffered, the taxpayer will be on that day.
Automatic exchange has reversed the balance of power
The tax administrations of more than a hundred jurisdictions transmit to France every year the balances, income and identity of account holders who are French tax residents, covering traditional banks, neobanks and platforms alike. The letters sent by the French authority inviting taxpayers to regularise, or demanding justifications for foreign assets, are generated from that data and arrive in waves. The taxpayer who waits to be written to has lost the initiative: they respond under tight deadlines, under the threat of procedures whose harshest, the deemed taxation of Article 755 of the French Tax Code, allows the authority to presume that assets whose origin is not justified constitute wealth received gratuitously, taxable at the highest transfer tax rate.
Voluntary disclosure: choosing your moment and your file
Disclosing voluntarily means filing complete amended returns, accounts, income for the non-time-barred years, holding declarations, together with a file explaining the origin of the assets, before any demand from the authority. The benefit is twofold: a spontaneous approach places the taxpayer in the most favourable position for the discussion of penalties, and it clears the future, since every additional year of delay increases the exposure. We build these files end to end: reconstruction of the banking history, characterisation of the origin of the funds (inheritance, past expatriation, income already taxed), quantification of the duties and penalties at stake, filing and follow-up of the procedure through to completion. The quality of the origin-of-funds file makes the entire difference between a costly regularisation and a controlled one.
Responding to the authority: the Article L. 23 C procedure
Where the French tax authority has identified a foreign asset, it may require the taxpayer, under Article L. 23 C of the Tax Procedure Code, to justify the origin and the circumstances of acquisition of the assets. That demand is a decisive moment: an absent, late or insufficient response opens the way to the deemed taxation of Article 755 of the Tax Code, with consequences often out of all proportion to the economic reality of the assets. We handle the response within the statutory deadline, the assembly of supporting evidence, the discussion with the tax office and, where necessary, the litigation of the resulting assessments, our tax litigation practice covering precisely these cases.
Trusts and foreign structures: the most technical layer
Trusts with a French-resident settlor or beneficiary carry their own French reporting obligations (Article 1649 AB of the Tax Code) and a specific taxation regime upon transmission (Article 792-0 bis), which foreign trustees frequently overlook. Offshore companies, foundations, Luxembourg life insurance wrappers with unreported underlying assets: each structure has its own treatment, filings and recharacterisation risks. The firm, whose practice is dedicated to international taxation, deals with these structures as a whole, handling the French layer and coordinating with the client's foreign advisers. Our French-American clients benefit from a practice used to articulating French disclosure with US obligations (FBAR, FATCA).
Our method
Every case begins with a confidential audit, protected by the lawyer's professional privilege, which quantifies the actual exposure before any decision: non-time-barred years, duties, interest and penalties at stake, under both the voluntary disclosure and the detection scenarios. The client then decides with full knowledge. That prior assessment is the hallmark of a properly conducted disclosure: a file is not submitted for reassurance, it is submitted because it has been measured to protect. The criteria for choosing counsel for these matters are set out in our guide on how to choose the best tax lawyer.
Frequently asked questions
I have a never-declared foreign account: what should I do first?
File nothing before your exposure has been measured. The first step is a confidential audit with a lawyer, protected by professional privilege: reconstruction of the history, characterisation of the origin of the funds, quantification of duties and penalties under each scenario. That quantification determines the disclosure strategy, not the other way round. Filing an incomplete or poorly built file can cost more than taking a few weeks to do it properly.
Can the French tax authority really discover my foreign account?
Yes, and in most cases it already knows about it: more than a hundred jurisdictions automatically transmit to France every year the identity of holders, balances and income of accounts held by French tax residents. The letters inviting taxpayers to regularise are generated from that data. The real question is not detection, but the position you will be in on the day it produces its effects.
What is the Article L. 23 C procedure?
It is the demand by which the French tax authority requires a taxpayer to justify the origin and circumstances of acquisition of assets held in undeclared foreign accounts or policies. Absent a sufficient response within the statutory deadline, the assets can be taxed outright as wealth received gratuitously (Article 755 of the Tax Code), at the highest transfer tax rate. Responding to that demand is a technical exercise that cannot be improvised.
Is a voluntary disclosure cheaper than a reassessment?
In the generality of cases, yes, and often markedly so: a spontaneous approach places the taxpayer in the best position for the discussion of penalties, whereas detection exposes them to the heaviest surcharges and, in extreme cases, to the deemed taxation of Article 755. Each file nonetheless has its own economics, depending on the origin of the funds, the years concerned and the income generated: that is precisely the purpose of the prior audit.
Does my foreign trust really have to be reported in France?
As soon as a settlor, a beneficiary or a trustee is a French tax resident, or the trust holds a French asset, French reporting obligations apply (Article 1649 AB of the Tax Code), and transmissions through the trust fall under Article 792-0 bis. These obligations apply regardless of the trust's validity in its home jurisdiction, and non-compliance exposes settlors and beneficiaries to specific sanctions. The analysis must cover the trust itself, its past distributions and its possible restructuring.
Do you hold undeclared assets abroad, or has the French tax authority written to you? Contact Alphard Law for a confidential audit, protected by professional privilege.