French expatriation – taxes
French EXPATRIATION – TAXES.
French expatriation – taxes.
French expatriation – taxes. Do you leave in France? You keep obligations with respect to the French tax department. Double taxations, the second homes taxations, income declarations… Small summary of the tax rules for the French from abroad.
The year of the departure, do not forget to discharge the income tax in proportion to the months spent on the French territory. The deadline of subscription of the income declaration online for this year was fixed on June 9th, 2015, midnight, for the whole of the geographical zones.
For the papers returns, the deadline of sending is fixed on May 19th, 2015 for all the zones, as attested by date on postmark. Privilege the online declaration on the site impots.gouv.fr in order to avoid the postal risks.
If you continue to perceive incomes in France during your expatriation, they will have to be declared each year.
To live abroad does not offer any more additional time to fill his declaration of wealth tax (ISF). The taxpayers liable to the Wealth tax domiciled out of France and holding a heritage of a higher or equal to chargeable net amount 2.57 million euros at January 1st must from now on “deposit their declarations of solidarity tax on fortune (Wealth tax) n° 2725 (CERFA n° 11284) at the latest on July 15th of the year of assessment “. (extract BOFIP)
To determine his tax residence.
According to the French criteria, you remain in particular tax resident as long as you remain more than 183 days a year in the Hexagon or if your family remains there (the place of schooling of the children being important) *. The French non-residents are imposed in France only on their incomes of French source.
Your incomes will be taxed in your host country. France signed tax conventions with nearly 125 countries. That allows the elimination of the risk of double taxation on the same income by envisaging a clear distribution of the right to impose between the two States. Watch out, the provisions vary according to the countries.
The non-residents profit from the family quotient (on the taxes due in France when you are abroad), but they are limited. They cannot any more benefit from the majority of the tax deductions and reductions (payment of a pension to a former spouse or an elderly person, etc).
Taxation of the real incomes.
Since 2013, the non-residents perceiving real incomes in France pay tax on their real income increased of 15.5% of social charges (CSG-CRDS). The European Court of justice concluded last February that these deductions are incompatible with the freedom of movement for workers.
The government announced to want to expect the Council of state decree to rule. Insofar as it is necessary in general from 5 to 6 months so that the Council of State hands down its judgment, the refunding of the undue deductions would be postponed at least the autumn 2015, with the risk of seeing the non-residents invited again to discharge CSG and the CRDS on their real incomes in France for 2014 in spite of the contrary ruling of the CJUE. Several deputies of the French from abroad work with the tabling of an amendment in the next rectifying finance bill, probably in June or July.
Transfers of real properties.
Until now, the French were taxed on their real appreciations at a different rate according to their tax domiciliation, according to whether they lived in the European Union or out of this one. This taxation of the sale was standardized to 19% on the last 1st January
Dividends, life insurances and transfers of movable properties.
The dividends distributed by French companies escape on their side from the income tax. But they undergo a withholding tax of 21 % for the residents of European Economic Area (EEA) including the 28 countries of the European Union, the Norway, the Iceland and the Liechtenstein. Apart from these countries, the withholding is of 30 %.
However, most international conventions envisage the reduction, even the suppression of the applicable withholding tax. But the rate of the withholding is changed to 75% on the dividends paid on an account given in a State or non-cooperative territory.
The profits on a life insurance withdrawal are also subjected to a withholding tax, with possible complement in the new home country. This rate is in fact the same one as for the residents:
* 35% if the repurchase intervenes during the first 4 years,
* 15% if the repurchase intervenes during 4 following years,
* 7,5% if the repurchase intervenes after 8 years.
However, the existence of an international convention will allow to decrease, even to remove this imposition at the source.
The securities transfer capital gains are imposed in the only place of residence except when:
– The transferor holds more than 25% of the company (45% except tax convention);
– The transferor is a person domiciled in a State or non-cooperative territory (75%).
Exit Tax was founded under the chairmanship of Nicolas Sarkozy in order to slow down the tax exile. It concerns the taxpayers (French or foreign) having resided in France during at least 6 years in the 10 last year who leave to settle abroad. To fall under this tax, it was necessary to control at least 1% of the capital of a company, or that the value of the held participation is higher than 800,000 Euros in value of the participations held during the transfer of domicile for tax purposes. The tax could be applied to the taxpayers holding a participation from at least 50% in a company for which this transfer can reduce the tax substantially.
* Other criteria of the tax residence in France: « Are thus regarded as fiscally domiciled in France:
– the people who have on the French territory their hearth or the place of their principal stay,
– those which practice a profession there, paid or not, unless they establish only this activity is carried on in France on a purely additional basis,
– those who have in France the center of their economic interests,
– government officials exerting their functions or operations managers in a country where they are not subjected to a personal tax on the whole of their incomes. »