The publication of the tax instrument comes after weeks of speculation and concern among those who operate trusts with links to France as to how long an extension would be granted and under which rules trust would need to file.
Tax instrument 13 K-5-12, which had an issue date of 18 July, confirms the filing deadline will be 15 September, for this year only, and that trusts with French connections on 31 July need to meet this date to avoid “high penalties”. The French tax authority will also want to know of any modifications to and/or terminations of trusts made between 31 July 2011 and 31 December 2011.
In addition, the government body has announced a sui generis (one-off tax) penalty tax of 0.5% for any settlors which have not made disclosures either by the 15 June or 31 August and who would normally fall under the wealth tax regime. The sui generis tax will have to be paid by the trustees before 15 September.
Meanwhile, non-French tax resident settlors have until 31 August to disclose the French sited assets held in trust under the normal wealth tax regime. If they do not disclose, a sui generis tax will be payable by the trustees at a higher rate, payable at the same time as the declaration disclosing the assets under the filing requirement.
"Mini-FATCA"
The new filing requirements follow the introduction of a new law last year, deemed a “mini-FATCA” by some, requiring trusts and their trustees to report on any French assets they held, as well as on any French beneficiaries, and/or any French settlors.
Under Loi de Finances Rectificative pour 2011 reporting is also required even if all the parties to the trust reside outside of France, or if the trust holds a French “situs” asset, including, in particular, real estate and shares in a real estate company – such as a foreign company that owns French real estate – and French financial assets.
