* Govt expecting big gains from taxpayers' foreign assets
* France struggling to rein in deficit to EU-agreed limit
PARIS, May 22 (Reuters) - The French government plans to ease penalties on firms that come clean on taxable undeclared funds, the Finance Ministry said on Thursday as a similar measure targeting individuals reaps windfall gains.
President Francois Hollande's government is clamping down on tax evasion as it seeks to bring its public deficit in line with an EU-agreed limit of 3 percent of national income by next year, a target economists consider extremely difficult to meet.
The new measure for companies would ease interest payments on taxes declared late, according to a Finance Ministry document laying out its strategy against tax fraud.
"The penalties would not be the subject of discussions or negotiations," Budget Minister Christian Eckert told journalists. "They will be subject to very clear rules as is the case with individuals' assets."
The government has recovered 764 million euros ($1.04 billion) since it offered last year to cut fines and penalties on individual taxpayers with undeclared assets abroad who come clean. More is expected as other taxpayers come forward.
"We can reasonably count on an additional 1 billion euros which can be used in 2014 ... to finance new measures," Finance Minister Michel Sapin said.
The Finance Ministry now expects 1.8 billion euros in gains from taxpayers previously undeclared assets this year, up from 800 million euros flagged in the 2014 budget.
The extra cash will be used to finance one billion euros in tax exemptions to low-income households announced in the run-up to Sunday's European parliament elections.
Taxpayers with cash stashed in Switzerland have made up 80 percent of the cases that have been regularised. Luxembourg followed with seven percent.
Switzerland's bank secrecy is gradually eroding away as foreign governments increasingly put pressure on the country to share information about their taxpayers who hold funds there.
Last year, the government recovered 10 billion euros from cracking down on all forms of tax fraud, 1 billion euros more than the previous year. ($1 = 0.7318 Euros) (Reporting by Leigh Thomas and Jean-Baptiste Vey; editing by Mark John)