In France, any person (natural or legal) intervening either as a party or as an intermediary in the conclusion of a loan agreement, or the drafting of the deeds recording the same, are required to declare this to the tax administration. This obligation is recalled in Article 242 b) paragraph 3 of the General Tax Code.
Items to be disclosed to the tax authorities include the date, amount and terms of the loan, the name and address of the lender and borrower.
Among the terms of the loan, of course, we find the duration of the loan, the interest rate applied, the repayment terms, the guarantees.., etc.
All loan agreements, regardless of their medium (written or verbal), must be declared using Form no 2062. This form must be sent to the tax authorities no later than 15 February of the year following the conclusion of the loan agreement. This declaration must be sent either by the debtor him/herself or by the intermediary if an intermediary intervenes in the conclusion of the loan agreement.
If this declaration is filed late, not filed, or filed with omissions or inconsistencies, fiscal sanctions (e.g. penalties) or criminal penalties may be applied.
Article 49 B of Annex III of the General Tax Code (referring to Article 23 L of Annex IV of the General Tax Code), however, set out the agreements that are exempt from such a declaration obligation.
The following are thus exempt:
- Loans whose principal amount does not exceed 5,000 euros. This amount has recently been increased. This was initially 760 euros, but was increased to 5,000 euros by the Decree of 23 September 2020 (text no 38, published in the official journal (JORF) under number 0235, on 26 September 2020), thus modifying Article 23 L 1 of Annex IV of the General Tax Code;
- Loan agreements which are concluded by the State, local authorities, or public institutions;
- Loan agreements which are concluded by a credit institution registered with the Prudential Control and Resolution Authority, regardless of the nature of this institution (borrower or lender);
- Loan agreements in the form of the issuance of cash certificates by banks, or the public issuance of bonds.
For interest-free loan agreements, the regime is a little different and the reporting obligations are different.
The reporting obligations concerning non-interest-bearing loans are governed by Article 1649 A a) of the General Tax Code.
This article specifies that persons, as well as public administrations, establishments or bodies subject to the control of the Administrative Authority, which grant or manage non-interest-bearing loans or repayable advances which do not bear interest, must declare, at the latest by 31 March of each year the amount of repayable advances granted; this point was fixed by decree (Decree no 2006-1277 dated 18 October 2006, which amended the provisions of Article 344 G quarter) of Annex III of the General Tax Code.