France

Tax-deferred employer plans

France's statutory pension, the régime général (basic), AGIRC-ARRCO (complementary), and special regime pensions, are pay-as-you-go social insurance systems. Like Germany and Japan, these are not funded trust arrangements and are generally not foreign trusts for §6048 purposes.

Article 83 plans (now largely replaced by PER Obligatoire): Employer-sponsored defined contribution retirement plans funded through insurance contracts. If managed through a segregated fund, they may be foreign trusts.

PERCO / PER Collectif (now PER d'Entreprise Collectif): Employer-sponsored savings plans where employee and employer contribute. Assets held in funds (FCPEs). These are collective investment vehicles that may have trust-like characteristics.

§301.7701-7 classification: For funded, segregated employer plans, the trust status is debated. French retirement vehicles are typically structured as insurance contracts or collective investment funds, not trusts per se. France has no domestic trust law tradition (trusts were only recognized for reporting purposes in 2011). Whether an FCPE or insurance-based plan constitutes a "trust" under §301.7701-7 is a practitioner-by-practitioner determination.

Treaty provisions: The 2009 Protocol replaced the first sentence of Art. 18(1) so that pension distributions are taxable only in the source State. Under Art. 29(2), the U.S. may still tax its citizens. Art. 29(3)(a) preserves only the social-security portion of Art. 18(1) (the 1994 text’s paragraph 1(b), a cross-reference the Protocol left unamended) for U.S. citizens. Private pension distributions from France receive no treaty-based deferral; the foreign tax credit is the only relief.

Rev. Proc. 2020-17 analysis: If the plans are classified as trusts and operate as nondiscriminatory employer plans, they may satisfy the Section 5.03 conditions and qualify. But the threshold question (is it a trust at all?) must be resolved first.

3520/3520-A treatment: Depends on the trust classification. If classified as trusts, file Form 3520-A and Form 3520 Part II for the part your own contributions fund, once your own contributions exceed the employer’s, counted as the note at the end of this section explains (Treas. Reg. §1.402(b)-1(b)(6)), or for any part you otherwise own. If not classified as trusts, no §6048 filing (though other reporting like FBAR and Form 8938 may still apply).

For a plan an employer contributes to, a trust holding it is generally a nonexempt employees’ trust described in §402(b). §6048(a)(3)(B)(ii) excepts transfers to §402(b), §404(a)(4), and §404A trusts from Part I, the participant’s own contributions included, and §679 does not make the participant the owner (see the Reporting Guide’s employer-plan section). Payouts the participant reports as compensation income are excepted from Part III. If the participant’s own contributions ever exceed the employer’s, the participant is treated as the owner of the part those contributions fund (Treas. Reg. §1.402(b)-1(b)(6)), reports it on Part II and Form 3520-A each year it is owned, and is taxed on its income each year. In that count, what the participant chose to put in, salary sacrifice included, is the participant’s, and anything the plan’s rules required taken from pay is the employer’s, as the IRS chief counsel read a national retirement fund in 1997. The rest is taxed when it vests and, after that, when paid out (§402(b)(1), (2)).

Tax-deferred individual plans

PER Individuel (Plan d'Épargne Retraite): Introduced in 2019, replacing PERP and Madelin. May be held through an insurance company (assurance) or asset management company (compte-titres). Contributions are tax-deductible in France.

If managed by a fund company with segregated assets, the PER is more likely a foreign trust. If wrapped in an insurance contract, the trust classification is weaker.

Assurance vie: France's most popular savings vehicle. Tax-advantaged growth (prélèvement forfaitaire after 8 years). Structured as an insurance contract, not a trust under French law.

§301.7701-7 classification: Debated. Fonds en euros (general account guarantee): the insurer pools the assets and guarantees a minimum return. Least likely to be a trust. Unités de compte (unit-linked): the individual's assets are invested in specific funds. Some practitioners argue this creates trust-like segregation. More likely to be treated as a trust.

Rev. Proc. 2020-17 analysis: Both PER and assurance vie are individual plans; §5.03(6) (the employer-plan nondiscrimination condition) does not apply. Even if classified as trusts, whether they meet §5.03(1)–(5) requires plan-specific analysis. Additionally, assurance vie is a general-purpose savings vehicle, not restricted to retirement, which raises the threshold question of whether it operates 'exclusively or almost exclusively' to provide pension benefits. The exemption is available only to an ‘eligible individual’ under §5.02: someone who is compliant (or comes into compliance) with U.S. income-tax filing and has reported the plan’s contributions, earnings, and distributions as income to the extent U.S. law requires; a participant who never reported plan earnings cannot rely on it until they do.

3520/3520-A treatment: If classified as trusts, file Form 3520-A and Form 3520 Part II. Given the uncertainty, the conservative approach is to file if the assurance vie holds segregated unités de compte. For fonds en euros, the trust classification is weaker and many practitioners do not file.

Gifts and inheritances

France is a common source of large inheritances for U.S. persons, given high property values and the réserve héréditaire (forced heirship rules) that mandate shares for children.

Inheritances and gifts totaling more than $100,000 in a year from one nonresident alien individual or foreign estate (adding together gifts from donors related to each other) must be reported on Form 3520 Part IV. Gifts from foreign corporations or foreign partnerships exceeding $20,573 (for 2026, indexed for inflation) are also reportable. This includes real property, bank accounts, securities, and assurance vie proceeds paid to a named beneficiary.

The U.S.–France estate and gift tax treaty may affect estate tax liability but does not change Form 3520 reporting. France imposes its own inheritance tax (droits de succession).

Penalties and practical notes

The French tax year is the calendar year: no conversion needed.

Annual statements (relevé annuel) from insurance companies and fund managers provide 3520-A data: contributions, withdrawals, fees, returns, and year-end value.

French trust reporting rules (Loi 2011-900, Article 14) require disclosure of trusts to French tax authorities. This is separate from U.S. Form 3520 reporting. The two systems are independent.

The core question for France is whether insurance-based products constitute trusts under U.S. tax principles. This is genuinely unsettled.