files Archives

An oversight, a mistake made in good faith or a poorly managed cross-border situation can lead to a tax offence, sometimes without the taxpayer being fully aware of it. Whether it’s a question of undeclared foreign accounts, a property that has been overlooked in the declaration of assets or a dividend that has been incorrectly broken down, it is often possible to regularize the situation spontaneously, before a tax audit is carried out. But to do so, you need to act correctly, methodically and strategically. Why regularize on a voluntary basis ? Spontaneous denunciation (or voluntary corrective declaration) enables the taxpayer to regain the initiative vis-à-vis the tax authorities. It consists in spontaneously declaring an error, an omission or an irregular situation before the launch of an audit or the receipt of a request from the tax authorities. This gesture can make it possible to:– limit or avoid penalties;– demonstrate good faith;– regularize a risky situation without media coverage or litigation;– start afresh on a sound footing in the event of a future transfer of assets, expatriation or inheritance. What situations are covered ? Voluntary regularizations concern many frequent cases, such as : – Foreign bank accounts forgotten or not declared (often old or inactive);– Real estate located outside the country of residence and not included in the declaration (IFI in France, cantonal wealth tax in Switzerland);– omitted foreign income (interest, dividends, pensions, rents);– undeclared patrimonial companies, in particular when they hold real estate;– errors in

Structuring your assets between France and Switzerland

BERGEOT PAOLI ASSOCIÉS

Residing in Switzerland with assets in France, receiving income from foreign sources, preparing a cross-border transfer of assets between generations… Structuring your assets between France and Switzerland is never a matter of standard logic. Each choice, whether it concerns the form of ownership, place of residence, matrimonial property regime or investment vehicle, has tax, civil and inheritance consequences. To ensure that these choices are secure and form part of a coherent wealth strategy, a few structuring principles need to be taken into account from the outset. Integrated approach to Franco-Swiss heritage In an international context, wealth structuring cannot be limited to an isolated tax or legal approach. It must be based on a cross-reading of domestic law rules, bilateral tax treaties, civil law (inheritance and matrimonial law) and personal and family objectives.The place of tax residence, which largely determines the taxation of income and capital gains, is one of the key points to anticipate. But simply changing your address is not enough to change your tax domicile. The Franco-Swiss tax treaty of September 9, 1966, interpreted in the light of administrative doctrine, requires a concrete analysis of the center of vital interests, the location of assets, the household and the professional activity. Securing asset ownership: choice of vehicle and terms and conditions Poorly structured cross-border assets can quickly generate tax friction, conflicts of classification (professional or private assets, income from movable or immovable property), and even cases of double taxation. It is important to structure the

Protecting international heritage: strategies to consider

BERGEOT PAOLI ASSOCIÉS

Holding assets in several countries raises complex and sometimes sensitive issues when it comes to preserving them over the long term. Entrepreneurs, managers and families whose assets are split between France, Switzerland and other jurisdictions are exposed to the risk of recharacterization, conflict of laws and blockage in the event of death or changes in their situation. Wealth protection cannot be approached in a one-size-fits-all manner. It is based on arbitrations adapted to the nature of the assets, their location, local rules of civil and tax law, and the long-term strategy adopted. Anticipating the tax risks of cross-border ownership Cross-border wealth is often exposed to a double constraint: on the one hand, excessive tax optimization can lead to contestation or recharacterization; on the other, a lack of structuring can increase taxation or render certain transfers inapplicable. Certain forms of ownership, which are tolerated in France, can produce very different tax effects in Switzerland, and vice versa. This is particularly the case with non-resident non-trading property companies or family holding companies. When poorly managed or inadequately justified, these structures can be assimilated to structures set up primarily for tax purposes, exposing their holders to potential reassessments, the questioning of exemptions or taxation in several states. Conversely, direct ownership of assets without an appropriate legal shield can lead to excessive exposure to inheritance or property risk, particularly in the event of separation, litigation or transfer of residence. Combining governance, detention and mobility Protecting an estate means adapting the

Franco-Swiss inheritance: organizing the transfer methodically

BERGEOT PAOLI ASSOCIÉS

Death knows no borders. When heirs are domiciled in two countries, when assets are divided between France and Switzerland, or when civil regimes differ, succession can become a complex operation, subject to interpretation and even litigation. Preparing for a cross-border transfer requires a rigorous approach, integrating civil law rules, local tax particularities and the effects of bilateral agreements. It’s not just a question of passing on the property, but also of doing so clearly, without friction, and with respect for the wishes of the person making the transfer. Anticipating conflicts between civil rules When it comes to inheritance, France applies the principle of hereditary reserve, which imposes a minimum share on heirs in the direct line. Switzerland, on the other hand, allows greater freedom of disposal. This discrepancy can create tension when the deceased resided in one country but held assets in the other, or when his heirs are established on both sides of the border. Since European Regulation no. 650/2012 came into force, anyone can designate the law applicable to their succession in their will, based on their place of residence or nationality. This choice of law is often overlooked, even though it is a structuring lever in an international succession. In addition, certain asset structures frequently used in France, such as non-trading property companies and life insurance policies, may not produce the same civil and inheritance effects when an heir is domiciled in Switzerland. It is therefore essential to analyze the interaction of national rules and

Asset relocation: preparing your return or installation

BERGEOT PAOLI ASSOCIÉS

Asset relocation, whether to France or Switzerland, is a delicate operation that requires a clear understanding of the tax consequences, legal impacts and asset strategies to be put in place. Whether you’re a French expatriate wishing to return or a Swiss resident transferring assets to France, a rigorous analysis of the consequences is necessary to ensure a smooth transition, free of unforeseen events. Anticipating the tax implications of residency, capital gains taxation and property management is essential to avoid unexpected tax adjustments. The tax and inheritance implications of returning to France A return to France after a period of expatriation, whether voluntary or taxed, has significant tax implications, especially in terms of unrealized capital gains, income taxation and inheritance tax. First of all, if you return to France permanently, you may need to declare any capital gains accumulated during the expatriation period. This exit tax (or tax on unrealized capital gains) may apply if assets have been transferred abroad prior to relocation, particularly real estate or shares in companies. Although France offers tax deferral arrangements in certain cases, a prior strategy is essential to avoid immediate taxation on these capital gains. Secondly, the return to France may lead to a reassessment of inheritance regimes: French inheritance reserve rules and inheritance taxes then apply, often more restrictive than in Switzerland. It is therefore important to take into account the tax implications of the transfer and management of assets, so as to plan ahead for any gifts or distributions between heirs, particularly

Impact of legislative changes on holders of crypto-assets in France

BERGEOT PAOLI ASSOCIÉS

Legislative developments in France concerning crypto-assets, particularly in the context of the Finance Bill for 2025, are of concern to crypto-asset holders. Indeed, this bill envisages incorporating into French law the provisions of the “DAC8” directive adopted on October 17, 2023 by the Council of the European Union. From 1ᵉʳ January 2026, crypto-asset service providers (“CASSPs”) would be required to declare directly to the French tax authorities crypto-asset transactions carried out through them on behalf of third parties. What’s more, the tax authorities havesophisticated tools such as data mining at their disposal to step up their tax inspections, particularly of foreign platforms. Against this backdrop of tightening tax legislation, and in the absence of anexit tax on crypto-assets, some crypto holders are seeking information with a view to expatriating to more crypto-friendly and tax-friendly climes. Switzerland thus presents itself as an attractive destination for crypto-asset holders in search of a more lenient tax environment. In addition to thetax exemption on gains from the sale of crypto-assets (as long as they are considered part of private assets), Switzerland is not part of the European Union and is therefore not subject to the “DAC8” directive. What’s more, innovative options make it possible to pay certain bills in Bitcoin, and even to pay taxes in cryptocurrency in certain cantons(Zug, for example), further enhancing the country’s appeal to crypto-asset holders. Before embarking on an expatriation project, it is nevertheless crucial to find out about the administrative and tax implications of transferring one’s tax residence

Interpretation of article 4 §6 b of the France-Switzerland agreement

BERGEOT PAOLI ASSOCIÉS

Article 4, paragraph 6 of the tax treaty between France and Switzerland of September 9, 1966 states: “(b) an individual who is taxable in that State only on a lump-sum basis determined by reference to the rental value of the residence or residences that the individual owns in the territory of that State.” At first glance, this provision might appear to be aimed at Swiss taxpayers taxed on the basis of expenditure. But this interpretation does not stand up to historical analysis. The first treaty relations between France and Switzerland date back to 1953. When the treaty was renegotiated in 1966, France wished to review a provision that limited its ability to tax people domiciled in Switzerland but with a secondary residence in France. This provision was based on a flat-rate assessment of income based on five times the rental value of the property, in accordance with the former article 164 C of the CGI (repealed in 2015). The Message from the Federal Council to the Federal Assembly of October 18 1966, relating to the agreement signed in September of the same year, clearly explains the reasons for introducing this clause. The French administration found it difficult to apply this taxation in practice, as it required proof of a stay in France of more than 90 days. It was this background that led to the introduction of article 4 paragraph 5 letter b, which subsequently became the current article 4 paragraph 6 letter b. The aim of this clause was

Swiss real estate funds: direct or indirect?

BERGEOT PAOLI ASSOCIÉS

In Switzerland, the legal framework distinguishes between two main categories of real estate funds: direct funds and indirect funds. This distinction has significant tax implications, which need to be taken into account when structuring the investment. Depending on the investment objective pursued, the choice of one or the other formula can produce very different effects. Real estate assets can be held in one of two ways. In the case of a direct ownership fund, the assets are held directly by the fund. Conversely, an indirectly-owned fund uses a structure in which investors hold shares representing a fraction of the assets under management. From an operational point of view, this distinction has no impact on how shares are acquired or recorded in the accounts. In terms of taxation, the differences are substantial. Direct funds are subject to direct taxation at fund level, which means that investors are not taxed on dividends distributed. Similarly, units held are not taken into account when calculating wealth tax, and capital gains are not taxed at investor level. Indirect real estate funds, on the other hand, pass on the entire tax burden to investors. They are therefore subject to income tax, wealth tax and capital gains tax. This absence of direct taxation for unitholders in direct funds is due to the fact that the tax burden is borne by the fund management company itself. This is reflected both in the distributions paid out to investors and in the fund’s net performance. Finally, it should be noted

Recovery period extended to ten years for audits of foreign tax residence

BERGEOT PAOLI ASSOCIÉS

The Finance Act for 2025, passed by the French National Assembly on February 5, introduces a major change in the tax auditing of non-resident taxpayers: the tax authorities’ recovery period is now extended to ten years (plus the current year) in the event of a challenge to the tax domicile abroad. A measure targeting false declarations of non-residence This reform responds to a long-identified problem: some taxpayers wrongly declare a tax residence outside France in order to avoid taxation on their income, assets or transfers. However, according to the legislator, proving the fictitious nature of this non-residence requires long and complex investigations, often incompatible with the standard three-year recovery period. The legislator therefore felt that extending the time limit was justified in these situations, following the example of the time limit already applicable to failure to declare foreign bank accounts or capitalization contracts. Extending the scope of the ten-year recovery period Until now, the extension of the recovery period to ten years only concerned taxpayers who failed to declare certain assets held abroad, and only income or assets linked to these accounts. The Finance Act for 2025 extends this extended deadline to all situations where the tax authorities dispute the taxpayer’s foreign tax residence, even in the absence of undeclared accounts. The aim of this provision is to make control procedures more secure, and to give the tax authorities greater leeway in complex cases, particularly where evidence is scattered across several countries. Extended scope of application

Family office and family governance: structuring for the long term

BERGEOT PAOLI ASSOCIÉS

Families with significant wealth, often spread across different countries, face complex management, governance, tax and inheritance challenges. Between family governance, ownership structures and estate planning, every decision taken today influences not only asset management, but also the integrity of wealth for future generations. Whether in a Franco-Swiss or international context, the establishment of a family office, the organization of family governance and the management of intergenerational transfers must be part of a long-term vision, structured and capable of adapting to changing family and fiscal needs. Family office: a pillar of wealth management A family office enables a family to centralize and coordinate the management of its wealth across different jurisdictions. Whether for real estate, financial investments, private securities management or even philanthropy, setting up a family office is a lever for organization and optimization. In France and Switzerland, families are often confronted with different tax regimes, making cross-border asset management a complex task. A family office can centralize the management of these assets, while guaranteeing tax compliance, particularly in terms of tax declarations, cross-border VAT and inheritance tax. It also offers the possibility of establishing wealth diversification strategies that take into account the tax specificities of each country and the reality of international markets. Family governance: anticipating to secure the transfer of ownership Family governance is one of the most effective tools for ensuring consistent management of family assets over the long term. It defines clear rules for asset management, voting rights, roles within the family

All files