Firstly James and Catherine … WOW! on this site redesign. Thank you for all the hard work you guys put into this community.
Looks like we’re coming back guys. Our family is planning to spend a year in France and we might just end up staying for good this time. If so, I have one big issue I would please love (looooove) some guidance on re taxes and social charges on foreign income.
If we stay in France(1) then I’ll be looking to declare income and pay our fair share of tax and social charges for our family
My income would be derived from our Canadian company (we have a very small incorporated Canadian company)
Once we become resident in France, how do I best(2) declare and pay my taxes + social charges (and access Carte Vitale) since my income is derived from foreign income?
I would strongly prefer not to register any kind of French business such as Autoentreprenuer etc. as we already pay in time and money and taxes, bookkeeping and accountants charges in Canada and don’t want to get hit in France for that as well.
I have dual Canadian and French citizenship so I don’t have to deal with visas or foreign work permits or length of stay issues.
Best = Paying fair share without overpaying - and of equal importance - paying fair share with the least amount of administrative overhead / paper shuffling etc.
The scenario I recently put to Grahame was this: Imagine I am a French kid, born and raised in France and fresh out of school and I get my first job. It’s an IT job employed remotely by a Canadian company who pays me 20,000 euro per year. How would I declare my (foreign) income and pay my tax and social charges in this case? I ask from this angle as perhaps the solution to my fictitious French kid might illuminate possible courses of action for me.
Any guidance, thoughts, opinions, links and especially real life connections (to folks who have been through this process already) would be much (much!) appreciated.
I’m interested too. We are moving out of the post factual basket of deplorables that the UK has become and moving to France. My employer is a US company, and they have to export dollars to buy pounds for my UK salary, so I think they’ll have no problems buying Euros to pay me instead.
So I just need to know about how I go about paying French taxes. I hear they’re higher, but that’s OK. We are not grasping, and want to pay our way.
“I would strongly prefer not to register any kind of French business such as Autoentreprenuer etc. as we already pay in time and money and taxes, bookkeeping and accountants charges in Canada and don’t want to get hit in France for that as well.”
Aye there’s the rub. Wouldn’t we all prefer not to have to set up a business structure and pay French cotisations, but unfortunately if you live and work in France, there is next to no way round it - unless you’re a cross-border worker or here on temporary secondment and can persuade another country to fund your healthcare in France.
If there was any loophole, I think someone would have found it by now. But the way the system is set up, you can’t “get in” any other way than by doing things properly, there are no side doors. Healthcare, cotisations and tax are getting more and more joined up with URSSAF and the fisc sharing information as of this year.
Income tax in France isn’t too bad unless you earn megabucks, but the social security cotisations hit hard.
For kind clarity I do want to restate: It’s not that I don’t want to pay French cotisations (that’s fine and fair) it’s that I’d rather keep my administrative overhead to a minimum while doing so. By the sounds of what you are saying, in my case there is no way to just Personally (versus Professionally) pay my taxes and social charges?
So I am curious now … for all of those Survive France Members living in France yet drawing income from abroad >>> Is setting up business structures (autoentreprenuer etc.) what you expats are doing in order to declare your foreign income?
On the income declaration form there is a box for each type of income, and you have to enter your different income streams in the appropriate boxes. You can’t just declare it as one lump. Earned income is treated differently from unearned income. Basically the difference is that social charges on professional income are around 40 per cent, as opposed to around 8 per cent on private income.
Choosing your business structure is an important decision and a very individual one, because what will work best for you depends on your particular business model and your household circumstances. In my case, I did in fact set up a micro entreprise, because that happens to suit my business model - relatively low turnover and next to no overheads, and no other household revenue streams. However it is a very limiting kind of business structure and I’ve been thinking for a while of changing to a réel because micro entreprise discourages one from investing in the business. For instance I quite fancy renting permanent office space so as to keep work and home life separate, but under micro entreprise that just wouldn’t make sense because I couldn’t offset the rental costs.
As it happens, 95% of my income is from French clients, but that makes no practical difference. It’s where you’re based that counts, not where your clients are based.
How does one go about best choosing which business structure would be best - I don’t suppose there is some at-a-glance cheat sheet showing the pros and cons of AE vs. Micro vs. SARL etc.?
Hmm ok. We’d be declaring what amounts to an annual (Canadian) family income of about $40,000CAD. I’ve got to say though, if roughly 40% of our declared income (all professional from my understanding) goes to French social charges, I’m not sure we’d be able to survive on the balance
The CAD to EUR exchange rate doesn’t exactly help.
You’ll find plenty of useful sites if you google, for instance there’s a quite useful comparison table here:
There also used to be a good comparison function on the apce website where you could do simulations of various regimes, it was an excellent resource, but the entire website seems to have been rejigged since last time I looked and I can’t see it now. But you could start here and have a delve around and see what you find. https://www.guichet-entreprises.fr/article/formes-juridiques/
You do need to do the sums. Running a business in France is not a walk in the park. When I first transplanted my UK activity to France, I had mainly UK clients and as you say it was hard trying to pay cotisations at French levels while keeping my fees competitive with my competitors in the UK. It wouldn’t have been sustainable in the long term. Fortunately I did manage to shift to an almost 100% French client base so I no longer have to worry about keeping my fees in line with UK competitors.
How does all of this effect people that aren’t citizens? If I’m on a 1 year Visitor VISA and I may 100% of my income somewhere else (US) do I pay French taxes? Obviously on this type I can’t even work in France if I wanted to. Are there different rules for different types of residencies?
It’s a question of residence. Probably most of us are not French citizens, I’m certainly not. If you’re on a visitor visa you’re not a resident and as you say a visitor visa doesn’t entitle you to work in France, you’re supposed to show evidence that you have sufficient funds to last for your stay, so I don’t think any of it will affect you, neither the healthcare nor the taxes. I get the impression that a fair number of US “visitors” do work while they’re here but and everyone turns a blind eye.
Thanks, as US citizen I’m under a citizenship based tax system (only two countries in the world do this, the other is Eritrea). This means if I’m a resident somewhere else that has a resident based tax scheme I have to pay taxes in both countries. The US however, has an exemption up to a certain amount ($84,000 USD?).
My issue is that I don’t want to pay French taxes but I don’t want to pay 40% to France and then 30% of what’s left to the US or vise versa.
If the tax situation only effects those who are residents than when I apply at the prefecture for an extension am I then going to fall into the resident category and have to pay taxes? This is from the consulate website.
“Should you then wish to stay more than a year in France, you will then have to contact the French local state authorities (“Préfecture”) to apply for an extension of your stay by a permanent resident card (“Carte de Séjour”) separate from your passport.”
Non-professional visitor status and professional long-stay status are two totally different things (statuses? stati?). Your visa defines your status and defines the rights, obligations and restructions that go with that status. As a Brit I don’t know too much about visas but I think that as a non EU citizen, acquiring a visa that gives you full professional resident status in France and everything that goes with it, is a wee bit more complicated than obtaining a non-professional visa. Non-professional visitor visas are relatively easy to obtain but are restrictive, particularly in that, obviously, they don’t allow you to work in France. Hence, as said, I think what most US citizens in your situation do, ie earning an income from the US while in France short term on a non-professional visitor visa, is keep quiet about it and carry on paying their taxes in the US. The embassies seem to turn a blind eye and as long as you don’t start advertising your services in France or working for French businesses, neither URSSAF nor the fisc is going to be interested unless maybe you’re earning megabucks. You’re taking nothing out of the French economy, you’re not using the French health service. They have plenty of more deserving targets to pick on. But if you’re looking at staying in France for longer than a year, then that’s a different issue and it seems likely that you would then have to negotiate the double taxation issue, because you would meet France’s criteria for fiscal residence. Why not ask your embassy, surely they know the answer?
This is the conclusion I’ve come to as well. My only issue with being on a non-professional VISA status is that I don’t get French health services. Is there any way someone can just pay for health coverage? I was researching Croatia and it seems even as a tourist resident you have to either have insurance or pay the Croatian Government 60 Euro a month per person for state insurance. Does France have something like this?
Our income will be made completely outside the country that we live in so I’ll probably never need to work locally.
I thought that proving you have adequate health insurance for the duration was one of the conditions of getting a visitor visa for France? This would mean private health insurance, since in order to apply to join France’s healthcare system (PUMa) you need to prove you have been legally resident here for at least 3 months, before you can apply and if accepted start paying contributions. Being here on a visitor visa would kind of disqualify you by definition I guess, since PUMA is specifically for “toute personne qui travaille ou réside en France de manière stable et régulière”.
The only other state healthcare option in France is AME, which is basically for illegals living here on a very low income with no savings. Visitors don’t have a way into the system. AFAIK, most EU state healthcare systems are for residents/workers only, Croatia may be a little unusual in having a healthcare scheme for visitors.
Having insurance is one of the conditions. What I was hoping was that like Croatia you could choose to pay for local insurance as opposed to having outside insurance. With Croatia it all depends on which official you talk to so everyone has different stories but some expats are told they HAVE to buy Croatian insurance even if they have their own, other officials were fine with them having their own. I’d rather pay out of pocket for local insurance if possible because dealing with outside insurance could be a mess.
So far though, paying cash for medical procedures in Europe have cost roughly what our after-insurance cost is at home.