Trusts – Your year-end “To Do List”

Trusts are still high priority for French tax authorities as evidenced by the recent publication of the Decree related to the Ordonnance published on February 12, 2020.

As year-end is getting closer Trustees should ensure they are up to date with their trust filing obligations in France to avoid heavy penalties.

As year-end is getting closer you should ensure you are up to date with your trust filing obligation in France. Please ensure that:

  • the annual trust return has been duly filed
  • the event trust returns in case of events affecting the trust (acquisition/sale of assets, distribution, modification of trust members contact information…)
  • The French Wealth tax and 3% tax returns have been duly filed (if applicable)

A review of the French assets held in trust should be performed. You should notably ensure all French assets i.e. real estate and financial assets have been identified.

Our recommendation is to proceed with an updated assessment of the scope of the trust reporting obligation in order to ensure compliance with French Law and avoid penalties (20 000 EUR per non-filed trust return, 1.5% sui generis tax, non-reporting penalty equal to 80% of the amount of avoided tax, late-payment interest). (see our Tax Alert dated June 24, 2019)

This review should be performed taking into consideration the recent update on trust. Indeed the Decree on November 1, 2020 related to the Ordonnance on February 12, 2020 extended the scope of the trust reporting obligation (see our post dated March 4, 2020):

  • Additional trust disclosure requirements for trustees established or resident outside the European Union in case of « Business relationships » with France
  • Additional information to be disclosed in the trust returns regarding any protector or any individual exerting an effective control over the trust assets.

No clarification has been provided on the notion of business relationship with France and we are still waiting for the new version of the Trust 1 and Trust 2 returns.

However, the Decree provides additional information on:

  • The disclosure of the identity and the nationality of the beneficial owner; and
  • The competent service to receive trustees’ returns. From now on, the returns should have to be sent to the following address: Direction des Impôts des Non-Résidents, Recette des non-résidents, TSA 50014, 10 Rue du Centre, 93465 NOISY-LE-GRAND CEDEX (France)

Based on the above, it is likely that the number of tax audit by the French authorities would increase given the economical context.

We remain at your entire disposal should you need anything on this matter.


Orianne Achéritéguy

Orianne advises companies and individuals in an international context on legal and tax issues regarding equity, executive compensation and governance. In particular, she assists her clients in the implementation of […]

Sarah Gabaly

Sarah has joined Deloitte Société d’Avocats in 2016 as a tax advisor of the Global Rewards Department. She provides advice to corporations and individuals in individual tax and Global equity […]

David Martin

David is Tax Lawyer. He has joined Deloitte Société d’Avocats in 2019. He mainly involved in Private Clients (income tax, wealth tax, transmission, inheritance, real estate structuring…) as well as […]