Hi all, we’re in the process of closing on a house and making the move to France in the next few weeks, and I’m planning to work remote with my UK employer and get paid GBP for the short-medium term (with permission from my employer).
I’m aware this might not be at all compliant with French law, as I will still be paying tax at source to HMRC. But until my company can setup a French entity, this is the reality. My wife will be working for a French company, so we plan to pay our mortgage and bills with her salary, and use mine for groceries and costs like that.
Has anyone experience doing something similar as a short term solution? How likely is it the French authorities would be able to spot it?
You will have to declare to French Tax folk… every last farthing which you and your wife earn… so you had better make sure that you do comply with French Rules…
Unlikely in reality… until such time as you want to apply for residency, or worse nationality, when they could well want financial records for the last X years to see how you’ve been supporting yourselves, whether you have enough coming in the household etc etc etc. For all the talk about cross border financial data sharing between tax authorities etc it tends to be a case of ‘the mechanism is there if we need it’, unless you’re one of the unlucky random ones chosen for audit or they think there’s some kind of suspicion they’re not spending their days trawling to see that my NatWest has 12p in.
That said, as I say if you’re ever intending to be in a situation where you’re throwing yourself at the mercy of a foreign country to be allowed to live there, not just pop in for a holiday or such, as the majority of us here are, it really is better as @Stella says to start as you mean to go on, declare everything, then you’ll be confident that at no time will someone connect the dots and not only want a load of extra tax (and perhaps fines) from you, but perhaps jeopardise any residency situation. I always say (not particularly correctly I appreciate) that you can do pretty much whatever you want in France as long as you’ve filled in the relevant forms and sent the taxman some money. I don’t know how much the NIMBY culture really exists here, whether people get stopped from doing things for random cultural reasons or whatever, it generally seems to come back to that they’ve not done the paperwork or paid the taxman…
Many stories out there of folks who tried to buck the system in France, and then got into a rather tricky situation. I know someone personally who fell foul of the French tax authorities and it wasn’t pretty how it played out. Just not worth the risk imo.
If my company isn’t willing to set up a French entity, am I allowed to still do it if I actually declare it in France and make the necessary social security contributions?
It would mean I get to keep a job I love, in a great company, not to mention the UK salary
No two ways about it, this isn’t complaint with French law not “might not be…”. It is a risk as protection of French labour law is far more ferocious than protection of French tax. Paying social security is a big thing and France is quite rightly proud of its worker protections.
If this is really short term then perhaps risk is low, although all it takes is an inquisitive official to bring this to light. However, although this is a financial hit perhaps you should look into portage salarial? This has a pretty hefty price tag but means that you will be legal and fully compliant with French law. It is not just you that has to pay social security but your employer as well! Via portage salarial this is sorted.
Next spring you will have to submit a household tax return giving details of all your worldwide income. So to exclude your UK earnings would compound your wrongdoing and start to enter into fraudulent territory. Which is serious here. Who pays for what is really neither here nor there. You will have to declare all your overseas accounts as well as income and there is a data sharing agreement so very little is secret.
I would suggest that you sort this as a major, major priority. It is sortable now, but might not be if left to run.
And I personally would not talk to your French tax office until you have determined a way forward. Many have limited understanding of international social security agreements and tax so can make things more complicated than they need to be.
Oh err, I’ve just seen you are both American! You need an independent tax advisor who is very well versed in French processes, not one of the ones who says that remote working is not an issue and then lets their clients get hung out to dry.
It is all doable, but will be a bit bumpy to start with.
If you have an EU passport then I think I’d just ignore the fact that you also a US national (well, except that you might not be able to ignore the IRS having an interest in worldwide earnings).
I think, as @JaneJones says the short answer is no.
Short term you might get somewhere with the Posted Worker directive - but I’d echo Jane’s and Véro’s advice - you need a tax adviser who is familiar with all of this.
Hiya, if you can invoice your uk employer as a consultant, then that is totally legit and you just then declare the consultancy fees on your tax return next year.
The situation was a little different in that they hadn’t declared overseas investments, but in essence I would say it’s the same in principle i.e not making the necessary declaration. As others have already said, early expert advice is important, as ignorance unfortunately doesn’t seem to be too acceptable here. Responsibility lies with the individual. The ‘right’ advice and following the right path = sleep easy at night.
If he sets up a consultancy with single contract isn’t there the risk that it would be considered disguised employment. Which is of course the wrong side of the law. So still a bit risky.
We looked into this (both my UK employer and me) when I moved to France. We took legal advice and were very strongly advised not to do this, but to instead open up an “enterprise sans établissement en France”… which was incredibly easy via URSSAF.
