France Demands Systematic Tax Information Exchange From Banks

by Ulrika Lomas, Tax-News.com, Brussels

11 September 2009

Determined to step up efforts to crack down on tax evasion, France’s Budget Minister Eric Woerth has announced his decision to demand assistance from the country's banks.

During a recent meeting held with representatives of the French banking federation, ‘la Fédération Bancaire Française’ (FBF), the Minister confirmed his aim to ensure that a systematic exchange of tax information takes place between the banks and the tax authorities, based on the systems in place in the UK and Ireland.

In concrete terms, a decree will be drawn up before the end of the month, which will require the banks to declare to the tax authorities all transfers of capital -- above a certain amount -- to specified financial centres.

Although precise details of the proposal remain to be clarified, the introduction of a new tailor-made decree looks set to fill the current gap in the government’s legislative and regulatory arsenal, in the on-going fight against tax evasion.

While Article L96 A of the Tax Procedure Code already authorises the country’s tax authorities to request information concerning the transfer of capital abroad by French residents, the information received under the auspices of this provision is limited, and as such deemed insufficient by the French authorities.

The FBF, which represents all banks located in France, has confirmed its commitment to fully cooperate with the Budget Minister's proposals.

Budget Minister Woerth also plans to hold talks shortly with representatives of foreign banks, seeking their cooperation.

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