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French offshore amnesty struggles to attract takers

Tuesday, 27 May, 2014

Some 23,000 French residents have disclosed their previously undeclared foreign bank accounts since the government launched its offshore amnesty in June 2013.

Of the 1,260 cases so far examined by the tax authorities, 80 per cent had at least one account in Switzerland, said Michel Sapin, France's finance minister.

The finance ministry originally hoped for a total of 50,000 disclosures yielding EUR2.5 billion, despite the amnesty’s unattractive terms. Unlike the previous disclosure opportunity in 2009, this amnesty does not allow taxpayers to come forward anonymously to get an indication of the consequences of disclosure. The terms of the opportunity do not even make clear that disclosure will forestall prosecution, and tax advisors have urged a cautious approach to taking it up.

By the end of October last year only 4,000 French residents had done so, though by December the number had reached 8,500, perhaps prompted by the introduction of stringent new anti-evasion laws.

According to Sapin, Switzerland will no longer be available as a ‘tax haven’ for French residents by 2016, as the government has escalated its enforcement action against Swiss bank clients. In 2009 the French authorities obtained a stolen disk containing the names of thousands of HSBC Geneva’s foreign clients, which led in April 2013 to the opening of a judicial enquiry into the bank’s activities. In the same month the French budget ministry asked Switzerland to hand over bank account details of more than 350 UBS clients suspected to be French taxpayers with EUR850 million of undeclared assets.

Ironically, the minister formerly responsible for countering tax evasion, Jerome Cahuzac, confessed last April that he operated an undeclared EUR600,000 Swiss bank account for 20 years before secretly moving it to Singapore in 2009.

Sources