Many traders think the tax authorities only care about large fortunes. That's wrong. On undeclared activity, the administration can go back 10 years. And the bill is built in three layers that add up: the tax you owed, a late-payment interest (a kind of "rent" the State charges you for money paid too late), then a penalty surcharge (a penalty that can almost double the bill).
And the real trap, in trading and especially in prop firms, isn't the tax on gains. It's forgetting to declare an account opened abroad. Here are the details of the amounts, article by article of the General Tax Code (CGI), the text that sets the tax rules in France.
Two separate obligations (and two different fines)
When you trade or receive payouts (profit payments) from a prop firm — a company that entrusts you with its capital to trade — you have two separate things to declare. They're constantly confused:
- Your gains. Trading capital gains (generally taxed at the 30% "flat tax", i.e. €30 of tax for €100 of gain) or prop firm payouts, treated as BNC — non-commercial profits, meaning: the compensation for a service you provide, not an investment gain.
- Your accounts abroad. Form 3916 / 3916-bis, to be filled out every year for each account opened outside France: an account with a broker (IBKR, Trade Republic…), on a payout platform, or on a crypto exchange (Binance, Kraken…). This obligation exists even if the account earned no gain. It's a simple reporting obligation: you declare the existence of the account, not its contents.
Simple image: it's like notifying the town hall that you have a swimming pool. It doesn't matter whether you swim in it or not — the declaration is due simply because it exists.
The scale of penalties (verified in the CGI)
1. Late-payment interest. It applies systematically to any tax paid late: 0.20% per month, i.e. 2.4% per year (article 1727 of the CGI). Good news: it is halved if you regularize on your own, before the tax authorities contact you.
2. Failure to declare. If you filed nothing at all (article 1728 of the CGI): +10% if you fix it quickly (spontaneously, or within 30 days of a formal notice), +40% if you don't act after that formal notice, and +80% in the case of hidden activity — meaning: a habitual and organized activity, never reported to the tax authorities, such as regular undeclared trading.
3. Omission or inaccuracy. If you did declare, but "forgot" part of it (article 1729 of the CGI): +40% for deliberate failure (a voluntary omission), +80% in the case of fraudulent maneuvers (a scheme intended to deceive the administration).
4. The undeclared account abroad — THE prop firm trap. €1,500 per account not declared (article 1736, IV of the CGI), raised to €10,000 per account if the account is in a country without an information-exchange agreement with France. And it's per year and per account. In other words, the bill climbs very quickly over time. According to the CGI, this fine applies independently of any tax that may be due.
5. Crypto accounts abroad. €750 per wallet not declared (article 1736, X of the CGI), raised to €1,500 if the value exceeds €50,000 at any point in the year.
6. Criminal penalties, when it becomes tax fraud. Up to €500,000 in fines and 5 years in prison (article 1741 of the CGI). And if the fraud relies on accounts opened abroad — the classic prop firm payout case — the penalties rise to €3,000,000 and 7 years.
Three concrete cases
Case 1 — "I declared my gains, but I missed the 3916." Julie trades on an Interactive Brokers account (Ireland) and receives her payouts from a prop firm on a foreign platform. She does declare her income… but forgets to report the foreign accounts. Two undeclared accounts = 2 × €1,500 = €3,000 in fines (article 1736 IV), even if she is perfectly up to date on tax. The fine doesn't depend on the gain: it applies as soon as the declaration is forgotten.
Case 2 — "I declared nothing at all." Karim receives about €8,000 in prop firm payouts per year for 3 years, without ever declaring anything. The tax authorities reclassify the activity as hidden activity: they go back 10 years, apply the tax due on the €24,000, an 80% surcharge (article 1728), plus late-payment interest (article 1727). On, say, €5,000 of evaded tax, the surcharge alone adds €4,000 — even before the interest.
Case 3 — "My payouts arrive in USDT on Binance." Idriss gets paid in stablecoin (a crypto indexed to the dollar) on a foreign exchange. He accumulates two omissions: the crypto capital gain at the time of converting to euros (to be declared), and the foreign digital asset account (3916-bis). The undeclared wallet is €750 (article 1736 X); above €50,000, €1,500. To which are added the penalties on the undeclared capital gain.
The reflex that saves you: spontaneous regularization
If you realize you've forgotten something, don't wait for the tax authorities to write to you. By regularizing on your own, before any formal notice or audit, the late-payment interest is reduced by 50% (article 1727, V) and the surcharge stays at the floor (10%, or even waived). The gap between "I fix it myself" and "the tax authorities catch me" quickly adds up to thousands of euros.
On the organizational side, keeping a clear record of each account, each payment and each conversion is a real reflex of a serious trader. A well-kept trading journal — like the one in the JARVIS member area, which combines screenshots, results and a mini discipline test — also serves, indirectly, to properly reconstruct a tax year. And to understand in depth the workings of a structured trading activity, the JARVIS Method training offers a complete path, from the technical framework to administrative management.
What to remember
- Two declarations, not one. Your gains on one side, the existence of your foreign accounts on the other. Forgetting the second is costly even when the first is perfect.
- The fines are fixed and cumulative. €1,500 per undeclared foreign account per year, €750 per undeclared crypto wallet: this doesn't depend on the gains.
- Spontaneous regularization really lightens the bill. Late-payment interest halved, minimum surcharge.
- Criminal penalties come quickly when the fraud relies on accounts abroad.
To go further on your overall framework — brokers, prop firms, withdrawal times, the trader's lifestyle hygiene — the comparison directories and the "My Trading" hub of JARVIS Institut usefully complement the tax part. And to follow the economic news that influences the markets, the blog and the "JARVIS Readings" are updated every day.
Indicative information (France, up to date as of September 11, 2026) — this is not tax advice. Articles 1727, 1736 and 1741 of the CGI are subject to an ongoing recodification (numbers likely to change in 2026-2027). For your specific situation, consult an accountant.
Educational content. Trading and prop firms involve a risk of capital loss. This is not investment advice.