Catégorie : Tax articles

Work of art and precious metal definition What does “working art” definition recover? According to French and European laws, working of art recovers notably the following elements: What does “precious objects” definition recover? Under French law, « precious objects » often refer to items like precious metals (gold, silver, platinum etc..), jewelry and precious stones, antiques, artifacts, and potentially other high-value items. Who the Tax Applies To In the context of the sale of works of art, the fixed tax applies to private individuals, associations and all entities that sell works of art, collectors’ items or antiques and that are not subject

Considerations about the applicability of French inheritance laws and taxes become relevant if you become a French resident, retire in France, or purchase property in the country. You need to understand whether these laws pertain to your possessions. There are circumstances in which non-residents and foreigners may opt for their home country’s laws to govern their assets. However, some limitations might exist when it comes to the division of assets located in France under French inheritance law. The rules of inheritance in France are rooted in the French civil code and work based on a residency system. This means that

The following description offers an in-depth understanding of tax litigation in France. A surge in tax litigation is observed in France due to tax deficit issues and alleged tax evasion, often related to topics like management fees, transfer pricing, intangibles, and more. French tax law is governed by the General Tax Code, the Book of Tax Procedures, and additional codes. Tax evasion and related offenses fall under the French Tax Code. The French tax system is based on self-reporting, with taxpayers filing annual income tax returns. In case of discrepancies or overpayments, authorities investigate and adjust accordingly. Taxpayers can engage

Undergoing a tax audit in France can be an extremely stressful experience, given the strict tax and accountancy laws that leave little room for errors and carry hefty penalties. Reasons for a tax audit can vary and may include: The tax audit process begins with a registered letter sent to the company’s head office, specifying the period to be audited and the concerned tax and providing the first intervention date. Typically, there is a 15-day notice period before the initial meeting. However, in cases of suspected fraud, the customs service may conduct an immediate intervention without prior notice, having the

The old French wealth tax, known as ISF (“Impôt sur la fortune”), which imposed a tax on worldwide net assets, has never been attractive for people to come in France and moreover, incited celebrities to leave le country as Yannick Noah. However, since 2018, the ISF was replaced by the “Impot sur la fortune immobilière” (IFI). This new tax is based on the same scheme as ISF but limited to real estate assets, as well as direct and indirect investments or interests in real estate and real estate companies, held on January 1st. This reform was lead with the aim

You are a French expatriate who owns at least one property in France that you rent out, and you are wondering how your income from property is taxed as a non-resident. First of all, it is important to check whether there is a tax treaty between your host country and France. If the French tax system applies, you will have to pay tax on your property income under the French tax scale with different applicable schemes (real amount or “micro”system). When you invest in rental property, choosing between renting it empty or furnished implies consequences on the applicable tax. Rental

You are a French expatriate and you are wondering how capital gains on property are taxed for non-residents. As a general rule, you are subject to the usual income tax and social security contributions. However, in certain cases, you may qualify for an exemption. What are the capital gains tax rules for non-residents? In France, making a capital gain is generally subject to taxation, unless you sell your principal residence. This rule also applies to the sale of shares or property held through a “société civile immobilière” (SCI) or shares in a “fonds de placement immobilier” (FPI). Being a non-resident

Tax consolidation involves combining the tax results of all the companies in a group. This means that losses made by one company in the group or by the parent company can offset the profits of the other companies. The Finance Act for 2019 introduced several measures to improve the tax consolidation regime. The main measures are summarized below. Tax consolidation mechanism: Companies subject to corporate tax under the general rules, regardless of their sector of activity, may, by option for a period of 5 years, constitute a group of companies in which the parent company, holding at least 95% of

One option for reducing the tax burden is to set up a subsidiary in a foreign country. A foreign subsidiary of a French parent company is considered a separate tax entity and is therefore not taxed in France, but rather subject to the tax laws of the country where it is located. By setting up a subsidiary in a foreign country, it is possible to benefit from more favorable tax treatment than in France. Once the subsidiary has been subject to the tax rules of the foreign country and has made a profit, it can pay dividends to its parent

When purchasing an asset that is expected to appreciate in value, it is crucial to consider the capital gains tax in France. Understanding how your gains will be taxed when you decide to sell your investments is essential, in order not to face important financial issues. Like most countries, France imposes a capital gains tax (CGT) on the disposal of assets that result in a monetary gain. However, not all gains are subject to the same tax treatment. The taxation of movable/intangible assets, such as shares and bonds, differs significantly from that of immovable/tangible assets, such as property. How are

I have foreign bank accounts – How am I supposed to declare it regarding French law in 2023? First of all it is important to get in mind that It is perfectly legal to open an account abroad. However, it is essential to declare it to the French tax authorities if you are a French tax resident. You must declare your accounts with your annual tax return using specific forms. If the mentioned account generates income, you will also need to complete other specific forms in addition. It is important to specify that tax authorities of other countries regularly send

As a non-resident owning property in France and/or abroad, you may be wondering whether you are liable for property wealth tax (impôt sur la fortune immobilière – IFI). The IFI applies only to persons who, on January 1st of the year, own net taxable property worth more than €1.3 million. These individuals are then required to file an IFI tax return the following year (N+1). This condition is verified for the assets held by all members of the tax household, including the taxpayer, spouse, civil partner (PACS) cohabitee and minor children for whom the persons mentioned have legal administration of