• You live in France and are tax resident of France?
Regardless of your nationality, you have to declare all your worldwilde income, whatever its source or country of origin.
Depending on the source and the country of origin, income will be treated and taxed differently.
If there is any doubt as to your place of residence, or if you could be considered resident of two countries, it is the provisions of the convention for the avoidance of double taxation which prevails.
Let's take some examples of UK income:
Property rental income and certain other foreign sourced income, such as public sector pensions or earned income from a foreign activity, should continue to be taxed in the UK, but you still need to declare the taxable amount on your French return. It won’t be taxed again in France, under the double taxation treaty, but it will be taken into account to work out at what rate other income should be taxed, and will have the effect of pushing your other income into a higher tax band.
Other pension income from private pensions and foreign state pension are assessed for tax in France and should be paid gross in the source country.
For the following types of income such as pension lump sums, tax exempt investments, dividends from foreign shares, premium bonds, offshore bank interest, capital gains tax and gites rental, it is advisable to ask assistance to complete your tax return.
• You live abroad and you have French assets?
Regardless of your nationality, you only have to declare income from French sources, even though they did not generate any revenue. Some of these assets will be taxable and other not.
The main categories considered as income from French sources are:
- income from immovable property situated in France or rights connected with such property;
- income from French movable property and any other stocks and shares invested in France;
- income from professional activities, whether employed or not, carried on in France or from for-profit transactions carried out in France;
- capital gains on the transfer of property rights when connected with businesses operated in France as well as immovable property situated in France;
- capital gains on the transfer of corporate rights when pertaining to companies having their head offices in France.
This list is not exhaustive, and for any other income not listed, please ask our tax team.
• Double taxation treaties
Double taxation treaties serve to prevent double taxation of income earned in one country by a resident of another country. It also makes clear the taxing rights between two countries on different types of income arising from cross-border economic activities. The agreements also provide for reduction or exemption of tax on certain types of income.
Please contact our tax team for any specific information on double taxation treaties.
• Tax forms
There are many different forms, but here are a few references that often apply to the expatriate community:
- Form 2042: this is the main tax from, which should include all of your worldwide income and gains.
- Form 2042 C (complimentary): this is an additional form, needed in various cases. The main ones are if you have any income from a personal business, such as furnished lettings or if you have paid any tax in another country which needs to be offset against French tax.
- Form 2047: this form, which must be completed by anyone receiving income from abroad, gives details of that income, even if the figures have already been mentioned on the main form 2042.
- Form 3916: this is necessary if you have any bank accounts outside France since you must provide annual details of these.
Contact us and we’ll get back to you as soon as possible.