taxes

You Have to File Taxes as a Fiscal Resident of France

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So in France you receive a tax bill for the current year based on what you were assessed the previous year.  You then pay that bill in payments so that by the time that year’s taxes are due, you will ostensibly be “ahead of the game.”  Of course, this depends on your income stability.  If you make a lot more money this year than last year, then those payments are simply a down payment on your future tax bill.  Conversely, if you are unemployed, you will still be paying into the system at the rate you did when you were employed.

Wait, Stephen, I thought you said I didn’t have to pay taxes?  You’re right, as a visitor, I don’t have to pay taxes, but I still have to file and declare taxes.

But the French government didn’t do their sums correctly, and I had to do a bit of correspondence with them to fix it.  In this blog post I told you that they recognized this error but they ended up only removing some of the amount, so I had to write another letter explaining that I didn’t owe anything.  It only took four months and two letters. 🙂

But the person who issued my corrections didn’t update my file, because I got a notice to start paying taxes based on last year’s amount…which I got dismissed.  So I had to draft another letter explaining (with photocopies of the dismissals) that not only did I not owe taxes for the 2014 taxes, but I did not owe advance payments for 2016, as I wouldn’t have any tax liability in 2015 either.  I only moved to my right-to-work status in January so next year I will actually owe something.

Remember in dealing with the French: be patient, have your documentation to the Nth degree and backups, and trust the process.  The fastest road to frustration is to imagine you are entitled to anything.

I expect to get a dismissal of my current tax bill.  I’ll let you know if something else happens.

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Mailbag: Passport Pages, Transferring Your Visa, and Taxes

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It’s been a while since I’ve done one of these, but it’s often helpful for me to share some of these answers to questions I get in email so that others who are also wondering might have their questions answered as well.

How does adding passport pages to my (US) passport or renewal of it affect my visa?

Well, this is a two-parter.  As of December 31st, 2015, the US Embassy in France is no longer adding pages to your passport.  What that means (and I confirmed this in person at the Embassy) is that you will have to apply for an early renewal of your passport, as US citizens living abroad are not permitted to mail their passport back to the US for pages to be added there.  For my battle-worn blue book, that renewal ends up being roughly 3 years early.  But given that I’m down to room for exactly 5 more stamps, it’ll have to do, especially since I have a lot of travel later this year.

As to how it affects your visa: it doesn’t.  If you’re in the first year of your long-term stay visa, your carte de séjour exists in the form of the sticker that OFII put in your passport roughly 90 days after you arrived during your follow-up visit.  If you add pages/renew your passport you will get your cancelled passport back and still show that sticker, if you need to.

If you’re in your second year and beyond, you will be issued an actual carte de séjour after your renewal, which effectively functions both as your ID and your visa.  Those stickers in your passport from years ago are then like the rest of the stamps in your passport — memories — but nothing legally important.

You said recently that you had to file taxes?  How did that go?

Great question!  Funnily enough, despite sending them a properly filled-out French tax return appropriate for a foreign filer, in which I indicated that my income had not been derived from French companies, they still sent me a bill for 1781 euros.  After some laughter with my accountant and attorney, an email was dispatched to the relevant department:

réf de l’avis:15 75 XXXXXXX XX
Nº fiscal déclarant: 30 25 XXX XXX XXX X

Messieurs,

Je reçois cet avis d’imposition dont je conteste le fondement. En effet, l’assiette de la CSG et de la CRDS est l’ensemble des revenus français quelque soit leur nature et montant.

La totalité des revenus composant l’assiette de cette imposition a été d’origine américaine, perçue et imposée aux USA conformément au traité fiscal franco-américain.

En conséquence, de par la définition même de cette double imposition CSG – CRDS, l’assiette de cette imposition ici présente est non conforme. Je demande donc son annulation immédiate et sans condition.  

Cordialement,

Stephen HEINER

The next day, which is essentially light speed by French standards, had this response in my inbox:

Monsieur,

Votre demande a bien été prise en compte. Vous allez bientôt recevoir un avis de dégrèvement.

Salutations.

Translation: You’re right.  You don’t owe any money.

Stephen: Gee, thanks. 🙂

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transferwise

Taxes and Wise

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I recently had the opportunity to meet with one of the readers of the blog over lunch.  We discussed some of his strategies for staying in France but since he had just recently arrived I asked him to check with some of his connections (he had done work at an accounting/consulting firm) about getting taxes filed.  That’s right — as an American, even if you’re here on a visitor visa and prevented by the terms of your visa from working for a French company in France, the French government requires you to file a tax return.

You read that correctly.  Now, despite the fact that you don’t owe any taxes, you still have to prepare the taxes, in French, according to French accounting laws.  If you don’t have these intersecting skill sets, let me know and I can connect you with an amazing firm that did this for me for the 2014 tax year.  If this has slipped through the cracks for you, let me know ASAP and I will try and connect you — there’s no fine and no fee to pay (as ostensibly, you don’t have taxes to pay) but you don’t want the French government catching you doing something you are supposed to do.  Better late than forgetting altogether.

2015 will be the last year that I will be considered a “non-fiscal” resident — as part of the path to citizenship (which involves my new visa) is paying taxes.  If you aren’t married to a French person, and don’t pay taxes for five consecutive years, you aren’t on the path to citizenship.  I still can’t say I “look forward” to paying taxes, but I do look forward to “being on the path.” 🙂

* * *

Early on in this blog’s life I talked about getting a French bank account.  It’s honestly something you’re going to need to do if you plan to stay here for longer than 6 months.  However, again pursuant to your visa status, you really only want wire transfers coming in from yourself, not from employers — even if those employers are outside France — this will just cause questions at the Prefecture should they look closely at your bank accounts when you come for your appointment.

Wire transfers are “old-fashioned” in our modern age and carry old-fashioned fees.  The originating bank charges the sender (i.e. YOU sending to yourself), the receiving bank charges the receiver (again, YOU), and then there are currency exchange fees.  However, this system is in the midst of being disrupted by a company started by the guys who built Skype and bankrolled by the likes of Sir Richard Branson.  It’s called Wise.  If you click this link your first transfer is free so you can try it for yourself with no risk.  To learn more about how they do this, and circumvent the wire transfer system, watch this funny video.

Hope you enjoy the service as much as I do.  I’m an unabashed user, though I can’t imagine my US or French banks have been happy to miss out on all those fees I used to pay them 🙂

Did you enjoy this article? TAIP is 100% reader-supported through tipping. If you want to leave us a tip of any amount it would be highly appreciated. These tips help support our efforts to keep TAIP an ad-free environment. Just as at a cafe, the tips are split evenly among the team.