French Income Tax for Non-Residents
Tuesday 25 February 2014
Persons not resident in France are taxed in France on their income from French sources only, regardless of their nationality, says Joanna Reintjes of AFA Expertise.
For most non-residents the following categories are considered as income from French sources:
- Income from immovable property situated in France or from rights connected with such property;
- Income from French movable property and any other stocks and shares invested in France;
- Income from business concerns situated in France;
- Income from professional activities, whether employment or not, carried on in France or from for profit transactions carried out in France;
- Capital gains on the transfer, for valuable consideration, of property or rights of any kind and profits derived from transactions, in particular those carried out by property dealers when such profits are connected with businesses operated in France as well as immovable property situated in France, immovable property rights connected therewith or shares in unlisted companies whose assets mainly consist of such property and rights;
- Capital gains on the transfer of corporate rights pertaining to companies having their head offices in France;
- Amounts, including salaries, in consideration of artistic or athletic performances supplied or used in France.
Those with second homes that are let out will be earning an income in France and this does need to be declared to the French authorities. There is a special centre for non-residents who deal with non-resident’s returns.
The following elements are also considered income from French sources if the person is resident in France for tax purposes in France:
- Pensions and annuities;
- Fees received by inventors or as copyrights as well as any income derived from patent and similar rights.
Taxpayers domiciled outside France who receive income from French sources or have available to them one or more homes in France must normally file a personal tax return. For those living in the EU to be completed by 30th June on Form 2042. This is available for download from impots.gouv.fr.
Income tax is charged to non-residents at a flat rate of 20%. A credit for tax paid will then be available when you complete your UK self-assessment return.
Those with second homes might not realise that they are running a business that needs to be declared as an activity. It can either be declared to the French tax authorities, or if you are running at a “professional” level, also to the Chambre de Commerce.
AFA Expertise are international accountants and tax consultants based in France. All services are available in both English and French.
Joanna Reintjes will be at the French Village, A Place in the Sun Live, London March 2014, where she will be presenting a seminar and where you can discuss your French tax queries with her over the three days.