I. Lessons from Previous Tax Regularisation Units
During the presentation of the 2027 Finance Bill, Prime Minister Sébastien Lecornu announced the reopening of a national tax regularisation unit as of 1 January 2027. This initiative comes against a backdrop of increased resources to combat tax fraud and continued international transparency in relation to taxpayers’ assets.
This announcement is not without precedent. France has previously introduced several regularisation schemes designed to allow taxpayers to voluntarily disclose previously undeclared assets or income.
An initial unit was set up in 2009, but it was primarily the Service de traitement des déclarations rectificatives (STDR), created in 2013 and commonly referred to as the “Cazeneuve unit”, that had a lasting impact on French tax practice. Until its closure on 31 December 2017, the scheme enabled more than 50,000 cases to be regularised and several billion euros to be recovered for the public finances.
From 2018 onwards, voluntary disclosure requests continued to be examined by local tax authorities. While this arrangement maintained the possibility of voluntary compliance, it also led to potential inconsistencies in the treatment of cases across different tax offices. The creation of a new national unit therefore appears to be aimed at centralising and harmonising administrative practices and providing greater certainty in the handling of cases.
II. A Significantly Changed Legal Context
The context in which this new unit is expected to operate differs significantly from that which prevailed when the STDR was created in 2013.
At the time, the main issue was the regularisation of foreign bank accounts that had come to light as banking secrecy was gradually lifted, particularly in Switzerland. Since then, the automatic exchange of financial account information has become the international norm. Tax authorities now have access to an unprecedented volume of information concerning assets held abroad by their tax residents.
At the same time, taxpayers’ assets have become considerably more diversified. In addition to the bank assets traditionally covered by regularisation procedures, new categories of assets have emerged, such as crypto-assets, international real estate assets and precious metals, which raise specific reporting and evidentiary issues. In this new context, a regularisation procedure can no longer be conceived solely as a means of dealing with foreign bank assets. It must be considered as a comprehensive tool for bringing taxpayers’ assets into compliance.
III. What Could Be the Scope of the Future Unit?
A. Undeclared Foreign Assets
Previous regularisation programmes were primarily intended to address undeclared foreign bank accounts.
By 2027, this issue may be more residual in nature. Bank assets that may still be subject to regularisation are likely to be those held in Non-Cooperative States or Territories (États ou territoires non coopératifs – ETNC) or in jurisdictions that remain outside international information exchange frameworks.
By contrast, several categories of assets could constitute the core of future regularisation cases.
Crypto-assets are among the most obvious candidates. Many taxpayers may be faced with longstanding reporting omissions, difficulties in reconstructing historical transactions or a lack of awareness of the applicable reporting obligations.
Real estate assets held abroad could also fall within the remit of the new unit. This appears all the more likely as international information exchange arrangements are gradually being developed in this area.
Lastly, the scheme may also cover certain foreign wealth-holding structures – such as companies, trusts or foundations – that have not been fully disclosed to the French tax authorities.
B. Under-Declared Assets
The scope of the future unit is not, however, limited to omitted assets.
It will also be necessary to determine whether the procedure will be open to situations in which an asset has been duly declared, but at an insufficient value.
This issue is particularly relevant in the context of the French Real Estate Wealth Tax (Impôt sur la Fortune Immobilière – IFI), where substantial differences in the assessment of fair market value may arise.
Similar difficulties may also arise in the valuation of shares in unlisted companies or other assets whose valuation relies on complex methods.
Extending the unit to such situations would provide taxpayers with a secure framework for the voluntary correction of tax returns, even where the assets concerned have not been entirely concealed.
The distinction between non-disclosure and under-declaration therefore appears to be one of the main issues that will need to be clarified when the details of the new scheme are released.
IV. Conditions for the Success of the Future Scheme
A. Financial Incentives
To date, no details have been provided regarding the practical arrangements for the operation of the future unit.
Experience from previous schemes nevertheless shows that the attractiveness of a regularisation procedure depends to a large extent on the benefits granted to taxpayers who agree to bring themselves voluntarily into compliance.
These benefits have traditionally taken the form of reduced penalties and fines. They are an essential part of the balance of the procedure, as they encourage taxpayers to voluntarily disclose situations of which the tax authorities may not yet be aware.
B. Evidentiary Requirements
Beyond the financial considerations, one of the main issues will be the evidentiary requirements applicable to regularisation cases.
The origin of assets has traditionally been one of the most difficult aspects of compliance procedures. This difficulty is particularly acute where assets have been held for several decades or where supporting documents are no longer available. Precious metals are a particularly sensitive example.
The success of the future scheme will therefore depend to a large extent on the pragmatic approach taken by the tax authorities when assessing the supporting evidence provided and reconstructing the taxpayer’s asset history.
An excessively rigid approach could discourage many voluntary disclosures and reduce the effectiveness of the scheme.
C. Protection from Criminal Prosecution
Probably the most important issue remains the protection from criminal prosecution associated with regularisation.
Experience from previous schemes shows that taxpayers are rarely willing to voluntarily disclose their situation without sufficient guarantees as to the potential criminal consequences of doing so.
It therefore appears essential for the public authorities to clarify whether the voluntary submission of a case to the future unit will prevent subsequent criminal proceedings from being brought.
This clarification should cover not only tax fraud, but also any related offences that could potentially be invoked, in particular the laundering of the proceeds of tax fraud.
Without clear guidance on this point, the practical scope of the future scheme could be significantly reduced.
Conclusion
The announced reopening of a national tax regularisation unit represents a major development in France’s policy of bringing taxpayers’ assets into compliance.
The success of the scheme will, however, depend less on its existence than on the practical arrangements governing its operation. Its scope will need to be clearly defined. Above all, taxpayers will need to be offered genuine incentives and sufficient legal certainty if they are to be encouraged to come forward voluntarily.
Unlike previous schemes, which were primarily designed to address the consequences of the end of banking secrecy, the future unit will need to address a broader, more technical and often more complex range of asset-related issues. Only under those conditions will it become an effective compliance tool and make a lasting contribution to strengthening voluntary tax compliance.
Jean-Luc Bochatay
Partner, Geneva
Family Estate Law (Head of practice)
&
Alain Moreau
Partner, Paris
Tax Law (Head of practice)
