I need some help regarding the French Tax treaty with the USA. An investment funds company in the USA claims that I have to pay them 30% tax on a classic IRA I have recently cashed in? Is this true?
No taxes were taken out by the investment firm when I cashed in recently due to my age and had stated that I am a French taxpayer on their form to cash out? So now 5 months later they say due to the W8 form that I had signed, I should pay the 30% back to them?
It would be great to know what my rights are in this case. I thought by simply reporting this as extra pension on my French tax return next year this would be sufficient (form 2047??)?
Thanks for any feedback
Iām assuming you are a US citizen. You need a US accountant I think - the US thinks revenue accrued anywhere by its citizens is taxable by them and getting out of it is difficult.
Hi Vero thank you but am looking for help in France.as no contacts left in the US!
I am a former alien-resident with European(Dutch) passport.
Then I think you need a proper specialist, maybe the US embassy could point you in the right direction. Or Franco - US tax lawyers.
You really need someone who understands what a W8 is to start with (and how many variants there actually are of that form), and that would probably be a specialised tax lawyer. My French accountants were less than useless (in fact, they pretty much ran the other way) when I asked them about something similar in the past and I had to go through the process myself, relying on the documentation I could find.
Your best bet is to contact the IRS staff at the US Embassy in Paris. We have always found them to be very helpful, and they will certainly know whether you have a US tax liability or not.
In the event that there is such a liability, then the US tax paid will be deductible from any French tax due on the same money. You should also be able to settle any indebtedness directly with the IRS rather than paying it to the Investment Company.
The US source income will indeed need to be reported to the French tax authorities on Form 2047 at the appropriate time.
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Thank you Robert! This is great help.