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ARTICLE · 19 SEPTEMBER 2016

French Tax Legislation Applicable To Trusts: Positive Developments Regarding Penalties

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Article 1736 IV bis of the French Tax Code (FTC) imposes very high penalties for trustees who fail to comply with filing requirements imposed by French tax legislation applicable to trusts.

FranceTax
Frederic Mege
Frederic Mege
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Article 1736 IV bis of the French Tax Code (FTC) imposes very high penalties for trustees who fail to comply with filing requirements imposed by French tax legislation applicable to trusts. Similar penalties exist for French tax residents who fail to disclose their foreign bank accounts, albeit at lower rates - the fine is 5% if the funds exceed €50,000. In a decision dated 22 July 2016, the Constitutional Court ("Conseil Constitutionnel") has cancelled the 5% penalty in relation to failure to disclose foreign bank accounts.

Penalties in respect of trusts

The penalties under Article 1736 IV bis of the FTC, for trustees who have failed to comply with the filing requirements for trusts, include a fine of either €20,000 or 12.5% of the total value of the assets held in trust, whichever is higher.

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