PARIS--French prosecutors recommended that HSBC Holdings PLC should stand trial for allegedly helping people evade taxes in France, a person familiar with the matter said Thursday.

If French judges decide to follow prosecutors' advice, HSBC could stand trial in Paris in the first half of next year. The judges could also dismiss the case.

Prosecutors began investigating HSBC in 2014 as part of a widening probe into whether the bank helped recruit customers in France, possibly breaching laws authorizing only French-registered lenders to sign up customers in the country. The investigation also examined whether the bank was complicit in laundering the proceeds of any tax evasion.

"We will continue to defend ourselves vigorously," a spokeswoman for the British bank said Thursday.

HSBC has been under scrutiny for years following a well publicized data theft by Hervé Falciani, a former employee, and the opening of a criminal investigation by U.S. authorities into its alleged aiding of tax evasion.

In France, details provided by Mr. Falciani to the French tax authorities spurred prosecutors to investigate whether the bank sheltered secret accounts and advised customers on how to avoid taxes.

Other foreign banks have become the target of tax-related probes in France in recent years. French authorities have been intensifying their efforts to crack down on tax evasion as the Socialist government of President François Hollande struggles to reduce the budget deficit in a sluggish economy.

Swiss rival UBS Group AG is also under formal investigation for alleged tax fraud and money laundering in France and has been asked to pay a bond of EUR1.1 billion in relation to the tax evasion probe.

A unit of J.P. Morgan Chase & Co. was also placed under investigation last year on preliminary charges of complicity in tax fraud. Prosecutors are investigating the role of J.P. Morgan in transactions entered into by senior executives of French investment firm Wendel Investissement that enabled them to pocket shares worth about EUR320 million.

J.P. Morgan has said it was "responding to and cooperating with the investigation," while Wendel said it wasn't involved in the case.

Margot Patrick contributed to this article

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com