I opened a branch office (succursale, not filiale) of my US start-up. I’ll be offering Database-as-a-Service to clients worldwide, with real-time replication of their data between servers in multiple countries.
What determines if payments from a client count as “French revenue” (that the succursale must pay French taxes on)? If they’re a French company? If their data is on one server in France even though it’s also on several servers outside of France? If I have web servers in different countries, and they happened to have signed up using a web server in France? Something else?
Where could I go to get France’s definitive answer on this?
Thanks in advance.
Whatever that means, Cloud, SQL, ??? The only thing to do is get professional advice 
It sounds as if you are asking about international BEPS legislation and enforcement?
BEPS is an international collaboration and France has signed up to it, as have most countries around the globe (including the US in theory at least). It is not an area where each country sets its own policy and gives its own definitive answer that may be different from the next country’s.
Since BEPS is so fundamental to operating in the digital economy and is evolving and getting more and more complex all the time, then if you are not up to speed with developments yourself it would seem a good idea to bring somebody onboard who is, before you start trading.
Sandcastle: I don’t think this applies. I’m asking what the criteria is for business revenue to count as French, which my French branch office will pay French taxes on.
@uncaged
“Where could I go to get France’s definitive answer on this?”
If you speak with the French Tax Authorities…
1 Like
The simplest answer in that case would seem to be, if your French office issues the invoice and collects the revenue and the transaction is included in the accounts of your French company, it must be declared as French revenue.
But if you are providing a digital service around the globe, it is quite hard to see how you would not be caught by BEPS. In which case the question would be: was it correct for your French office to issue that particular invoice and collect that particular revenue? or alternatively, Has your French office put through its books all the transactions that it should have?
If you are subjectzs to a tax investigation a few years down the line and it emerges that you got it wrong, you risk paying a high price.
1 Like
Sandcastle: BEPS sounds like it’s about trying to get out of paying taxes (or the least taxes) by working the system (systems of multiple countries). I’m not doing that. I actually want to show income for both the US base and the French branch. Clients will sign up through the website, and I could choose or choose not to have the website running in servers in France (plus other countries), if that makes any difference. Invoicing will be automatic, through the web application. Clearly, if I provide any personal service (like consulting), that will be French revenue, regardless of the location of the client. I’ve talked with my expert-comptable, and I’m still not clear of exactly when to designate a client’s payments as French revenue. She thinks that if one of the servers I’m replicating a client’s database on is in France, then it’s French revenue, but that doesn’t sound right to me, especially for clients outside of France. Besides, with that logic, I’d need to pay taxes to each country where I have servers, even if I don’t have an office there. And what would I do, split their monthly subscription into a portion for each country that their data lives?