Let’s talk taxes on your large transfers to la France.
Helping out a loved one, setting up your étudiant universitaire or putting down that payment for your Parisian pied-à-terre — getting your large money transfer to France is the easy part.
What comes after is something we all can’t avoid: the laws and legal paperwork that go along with transferring large amounts of money. Before you move your money out of the US, get familiar with France’s remittance laws and regulations.
How France regulates large remittances
Gift taxes are just one part of France’s complicated inheritance laws, which are generally based on your relationship to the beneficiary of your gifts of cash or property. In France, children and spouses are considered equal “protected heirs,” which limits how much you can legally give each.
It’s possible for your French family to receive one-off gifts of cash tax-free. These amounts range from some $115,000 to children to about $35,000 to grandchildren and $18,000 to siblings.
Note that inheritance laws may not apply to remittances sent from another country. But given the complexity of these laws that are deeply entrenched in legal requirements and exclusions, your loved ones will benefit from an expert in French laws when receiving large amounts of cash.
What are the penalties for not filing a large remittance?
Just as US citizens are required to submit annual tax returns, French citizens are required to submit a déclaration des revenues each year. If your recipient fails to declare a large remittance on their tax returns, they could be on the hook for stiff financial penalties equal to 5% or more of the remittance amount. If the government determines that they’ve willfully ignored the law, tax penalties can soar to a severe 50% or more.
French banks are required to record the source of large transfers and report any suspicious deposits to the government. Encourage your family and friends in France to declare any large remittance on their general tax returns.
Do I have to report large transfers out of the US?
Yes. The US government monitors transactions into and out of the country. With more focused attention on money transfers since 9/11, if you fail to report a remittance of $10,000 or more, it will likely be discovered.
By law, banks report all large cash transactions and any amount that raises an eyebrow. Money transfer businesses, which often solely send money between countries, sometimes have reporting thresholds as low as $1,000.
Sending a lot of money out of the country? Know what the IRS expects of you.
How will my loved ones receive my remittance in France?
Your many options for sending money to France include bank-to-bank transfers, cash pickups and transfers to mobile wallets.
If picking up your money in person, your loved ones may need to submit government-issued ID or a transaction confirmation number to prove they’re your intended recipient. For electronic transfers, they may not need to submit any information at all.
Confirm with your bank or independent money transfer provider the exact information your friends and family might need to receive your funds.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.