# Is an IRA considered by France as a Compte bancaire or Assurance vie ?



## barnellparis

Hi,

I'm a US expat living in France since 1987. Before that while I was working in the US I opened an IRA, to which I haven't made any contributions since 1987. That IRA being still open, I have to report it to the French tax authorities, which I have been doing for at least 4 years. Now in 2021 the French tax return has changed a little and while I know how to report regular bank accounts, I'm in doubt as how to report my IRA. Is it a compte d'épargne under the compte bancaire section or is it an assurance vie ? Thanks in advance for your help.


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## Bevdeforges

Nope - it's not a compte bancaire and it's not an assurance vie. I reported my IRA and 401K for a few years as assurance vies until I was referred to the US/France tax treaty. IRAs are specifically listed in section 18 of the treaty as "government pension plans" - meaning that they are taxable only by the IRS according to their rules. Withdrawals are reportable as income on your French tax declarations - but they are subject to the same "tax credit at French tax rates" as your US SS benefit payments.


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## barnellparis

Many thanks Bev.


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## mrs canoe

Hello all, 

I'm also working on my tax return, first time online. On last year's french tax return, I listed all my bank accounts as well as my IRA and 401k accounts. This was for Form 3916.

Bev, I understand what you say about the taxation of the IRA and 401k withdrawal pertaining to the US/France tax treaty, however, isn't that a separate issue from the "accounts held à l'étranger" reporting requirement?

As there is a penalty of 1500€ per account not reported, I don't want to leave off these accounts if they're required. There has been some discussion on Facebook groups about this, with a British financial planner stating that if money can't go in and out, it doesn't have to be declared. That makes sense, however, when I read the impôts site reporting requirements, it doesn't mention that:

"La déclaration concerne tout compte ouvert, détenu, clôturé ou utilisé à l’étranger, pendant tout ou partie de l’année n. Elle concerne également tout contrat de capitalisation ou placement de même nature souscrit hors de France à un moment quelconque, en cours de validité ou dénoué durant l’année n"

I also saw, on VILLAGE DE LA JUSTICE site, "that the accounts recording only the entry of interest in the sums in deposit and the payment of management fees are now among the accounts to be declared." 

All that to say, sigh, I will go back into my return, which for my region may be modified until June 8, and and will add these accounts.

If anyone has more information on this, that would be great !! Thanks in advance ☺😘


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## Bevdeforges

Take a look at Article 18 of the US/France tax treaty:


> (c) For purposes of this paragraph:
> (i) in the case of the United States, it is understood that a French pension or other retirement arrangement organized under the French social security legislation shall be considered to generally correspond to a pension or other retirement arrangement established, maintained, and recognized for tax purposes in the United States; and​​(ii) in the case of France, it is understood that the social security or similar legislation of the United States, qualified plans under section 401(a) of the Internal Revenue Code, *individual retirement plans *(including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), *individual retirement accounts, individual retirement annuities, and section 408(p) accounts)*, section 403(a) qualified annuity plans, and section 403(b) plans *shall be considered to generally correspond to a pension or other retirement arrangement established, maintained, and recognized for tax purposes in France*; and​​(iii) a pension or other retirement arrangement is recognized for tax purposes in a Contracting State if the contributions to the arrangement would qualify for tax relief in that State.​


​I have quoted this section to the tax office when they called to ask me what my "IRA distribution" was (reported on the pension line on form 2047). I did report the IRA and 401K for a while as a "foreign assurance vie" (because they met the requirements for a non-taxable status like various French retirement savings programs) but stopped doing so once I found this section of the tax treaty. Have not had any problems with this since then.


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## mrs canoe

Bevdeforges said:


> Take a look at Article 18 of the US/France tax treaty:
> ​I have quoted this section to the tax office when they called to ask me what my "IRA distribution" was (reported on the pension line on form 2047). I did report the IRA and 401K for a while as a "foreign assurance vie" (because they met the requirements for a non-taxable status like various French retirement savings programs) but stopped doing so once I found this section of the tax treaty. Have not had any problems with this since then.





Bevdeforges said:


> Take a look at Article 18 of the US/France tax treaty:
> ​I have quoted this section to the tax office when they called to ask me what my "IRA distribution" was (reported on the pension line on form 2047). I did report the IRA and 401K for a while as a "foreign assurance vie" (because they met the requirements for a non-taxable status like various French retirement savings programs) but stopped doing so once I found this section of the tax treaty. Have not had any problems with this since then.


That's great Bev. I see this phrase "shall be considered to generally correspond to a pension," which differentiates a retirement account from an investment account. 😁

Thank you so much, you're the best !!


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## nroulleau

Bev, you seem to have a firm grasp of this topic, and I don't mean to jump on the thread - but I read you to be saying that for and IRA, for example, simply held in the US, no annexe 3916 is needed to report its existence, but any distributions therefrom would be reported as pension revenue in 2047. Is this correct? (In the US, doing declaration for my dad in France, for whom I was recently granted habilitation familiale due to incapacity - so getting up to speed in a steep learning curve) THX!!


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## Bevdeforges

Pretty much. IRA distributions are considered pension payments. The IRA itself is a "national pension" per the US-France tax treaty (Article 18 if you want details). And the foreign pension payments are reported on form 2042, line 1AL and on form 2047 as pensions and carried to section 6 as taxable revenues subject to the right to a tax credit equal to the French tax.


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## skhosro

Bevdeforges said:


> Pretty much. IRA distributions are considered pension payments. The IRA itself is a "national pension" per the US-France tax treaty (Article 18 if you want details). And the foreign pension payments are reported on form 2042, line 1AL and on form 2047 as pensions and carried to section 6 as taxable revenues subject to the right to a tax credit equal to the French tax.


Hi Bev,

I wonder if you know whether a French citizen residing in France with American green card is required to report their French assurance vie account on their US tax return FBAR forms? Isn't assurance vie just another form of retirement account which is exempt from reporting per IRS rules? Any guidance would be appreciated.


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## Bevdeforges

skhosro said:


> Hi Bev,
> 
> I wonder if you know whether a French citizen residing in France with American green card is required to report their French assurance vie account on their US tax return FBAR forms? Isn't assurance vie just another form of retirement account which is exempt from reporting per IRS rules? Any guidance would be appreciated.


Assurance vie is one of those things that causes all sorts of tax problems for those filing US returns. But if you are resident in France how do you still have a Green Card? I would surrender it if I were you - because it turns into a pumpkin after one year anyhow.

But to answer your other question, no assurance vie is not considered a retirement account and is not exempt from reporting if you are subject to US reporting. The exemption in the US-France tax treaty only applies to US government funds like IRA, 401K and similar tax deferred funds. Assurance vie are private investment contracts and most tax advisors will tell you they are "PFICs" which involves fairly complex reporting for US tax purposes.


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## skhosro

Thank you very much. That helps


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