Taxation: The Return of the Tax Regularization Window for Undeclared Foreign Assets in 2027

The French government is preparing to reopen a tax regularization unit in 2027 to encourage taxpayers to voluntarily disclose assets held abroad that have not previously been declared.

Nine years after the closure of the Service for the Processing of Amended Tax Returns (STDR) at the end of 2017, this announcement forms part of a broader budgetary recovery strategy aimed at diversifying public revenues while strengthening tax compliance.

For the taxpayers concerned, this announcement marks the return of a predictable framework, but it also raises a crucial question: should they wait for the official opening of the new regularization window, or should they take steps to regularize their situation without delay?

A “STDR 2.0” in an Era of Full Transparency

Between 2013 and 2017, the previous regularization unit (STDR) processed more than 50,000 cases,bringing approximately €32 billion in assets back within the French tax authorities’ scope and generating €8 billion in revenue for the French State. At the time, the scheme accompanied the gradual end of banking secrecy.

Planned as part of the 2027 budgetary guidelines, the future regularization window will operate in a radically transformed environment:

• Automatic Exchange of Information (AEOI): The French tax authorities now receive financial data from foreign banks on a massive scale.
• The monitoring of crypto-assets: With the entry into force of regulations such as DAC8, digital-asset platforms are actively sharing information about the identities of their users.
• Artificial intelligence: The tax authorities increasingly rely on data mining to cross-reference wealth data and identify inconsistencies.

Concealing assets has therefore become an increasingly risky option.

What Will the Scope of the 2027 Unit Be?

Although the precise penalty scale has yet to be determined by the government, tax law specialists anticipate a broader scope of intervention than in the past. The unit is expected to deal with:

1. Traditional financial assets: Undeclared foreign bank accounts and life insurance policies.
2. International real estate: Property held outside France, particularly omissions or undervaluations relating to the French Real Estate Wealth Tax (IFI).
3. Digital currencies: Crypto-asset accounts and wallets held on foreign platforms.

Wait Until 2027 or Regularize Today?

The announcement of the reopening creates a dilemma for taxpayers whose tax situation is not compliant. Two strategies are available:

Option 1: Wait for the regularization window to open in 2027

• Advantage: The certainty of benefiting from a standardized, public penalty scale, potentially more lenient than the maximum sanctions applicable in the event of a tax audit.
• Major risk: Time is of the essence. If the tax authorities initiate an audit, issue a formal notice, or receive an automatic banking alert before 2027, the taxpayer may lose the benefit of the “voluntary” nature of the disclosure. The applicable sanctions may then be at their maximum level (fixed fines for each year of non-disclosure, surcharges ranging from 40% to 80% for deliberate non-compliance, and potentially criminal proceedings).

Option 2: Initiate a voluntary regularization under ordinary procedures

There is no need to wait until 2027 to become compliant. Regularization under ordinary procedures remains possible at any time through the standard tax authorities. Although the absence of a centralized official penalty scale creates some uncertainty regarding the reductions that may be granted, starting the process immediately allows the taxpayer to establish a formal record of their situation and helps protect them against the risk of an unexpected tax audit.

Conclusion: Technical Preparation Is Essential

Whether a taxpayer chooses to take action immediately or wait until 2027, wealth management professionals are unanimous on one point: anticipation is key.Reconstructing the history of accounts that may have been opened decades ago, documenting the origin of the funds (inheritance, professional income, etc.), and calculating the taxes that should have been paid can require several months of technical work. Preparing the file in advance is therefore essential to ensure that the taxpayer is ready to act at the most appropriate time. Please note that, once a formal notice has been received from the French tax authorities, you will have 30 days to respond.

Contact our tax lawyers without delay!