[Wobblecat]

Hi all, i apologise in advance if this question has already been answered (or something similar) but i failed to find it when i looked.

I have rented a home in France since late April 2008, this house is solely used as a holiday home (fishing retreat) for myself when i am in Europe. i also use the house as a staging post for when i go to the UK to visit my daughter.

I have received a letter this week from the local tax office asking for a declaration of income for the year 2008.

I am a self employed consultant and i work all over the world (And i mean ALL OVER) as a result of this i have not worked in France, nor worked for a French company and not paid any wages into a French bank account. I have also spent less than 183 days in France during 2008.

My principal residence is in the Philippines, this is also a rented house that is rented in my partners name as she is local there. As a result of this it is very difficult to obtain any official papers showing that i actually have a residence there, all i have are all the stamps in my passport showing i am visiting several times a year.

I am not sure what response to give to the demand for my income for 2008 as i dont beleive i qualify as a french tax resident at all for the following reasons,

1. I spent less than 183 days in France
2. I have no employment in France
3. I paid no income in France
4. I have no assets in France
5. I do not consider France to be my main residence
6. The bank account i have in France is only for direct debits to cover the holiday home (i dont even have a cash card or cheque book)

I hold a UK passport and have been a non resident for over five years from there.

Any advice on how best to proceed with the local tax office would be greatly appreciated. I was (wrongly i think!!) advised that i did not have to make any declarations to any official body in France if the house is to be used solely as a holiday home....

To date my limited dealings with French officials have been very difficult as i dont fit into their model of a 'normal person'with a fixed home, place of work and income....

onwards and upwards...

 

[Bevdeforges]

Your best line of argument with the French tax authorities will be to show them that you are tax resident in the Philippines. The fact of not spending at least 183 days a year in France is in your favor, but not determinant. If you pay taxes on your income in the Philippines, that's probably the best "proof" that you're tax resident there.

The tax office does make mistakes, and the trick of working things out seems to be to present them calmly with evidence that supports your side of things without ever actually "accusing" them of being in error.

Basically, you need to show the tax office where your tax residence is - that is, where you do pay your taxes and have the bulk of your "centers of interest." If you pay bills in your own name in the Philippines, showing where you live while there, take copies. Where is your consulting business established? Any sort of paperwork showing that would help.

It probably wouldn't be a bad idea to put your name on the lease for your home in the Philippines. It would provide one more justification for claiming it as your tax home.

But in any event, you probably need to take an appointment with the tax office to demonstrate to them that you do have another tax home elsewhere. Just bring lots and lots of paper to prove your point.
Cheers,
Bev

 

[Wobblecat]

Hi Bev,
unfortunately that would be the easy answer...

As i have been 'on the road' for the last five years i have never qualified as a tax resident in any of the countries where i have been....

I did ask about paying tax in the Php and my bank manager asked me if i was sick.

The business is just me so is not a registered business anywhere in the world, i do put my Philippine adress on my invoices.

If i have to make a declaration to the French would this just be for the period that i have rented the house in France or the last five years?

All i could take to the local office would be the proof of my extensive travel and therefore showing that i have not been in France more than 183 days.

During 2008 i worked mainly in India and Malaysia so would i need to declare these to the French office? (i do see that France talks about a worldwide income)

I am not sure about how to open a dialogue with the French office without opening a rather large can of worms.....

Advice greatly accepted or contacts that deal with issues like these!

 

[Bevdeforges]

Hm, I sort of suspected this might be the case.

The French are apparently claiming you as a tax resident, since France appears to be the only country in which you have a residence in your own name. Thus it can be argued that France is your primary center of interest, since it's the one place you will be returning to on a regular basis.

Problem being that, if you are tax resident in France, then you're going to have to do something about cotisations - social insurance payments - which probably means registering your business in France. (Even a one-person business has to be registered in some manner.)

You can probably get away with claiming that you have "relocated" to France from the date you rented your home here - though not having any other tax residence does leave you open to further claims. For example, if you spend more time in France than anywhere else in the world, they could claim that France has been your de facto tax residence for some time and go for back taxes - though if you file a return based on your April "arrival" for 2008, they may just let it go and add you to the French tax rolls so you file from this point forward.
Cheers,
Bev

 

[Wobblecat]

Thanks Bev, it was never going to be pretty......
i ran my income through the tax calculation i could find online and it did not seem that bad.
What i could really do with is some sites that would give me real information on what i am actually supposed to be paying, something that details all the expenses i accrue, for example supporting my ex wife and daughter, i presume there is some releif for the things you have to pay.....? or is your total income just considered taxable in France?

 

[Bevdeforges]

Thanks Bev, it was never going to be pretty......
i ran my income through the tax calculation i could find online and it did not seem that bad.
What i could really do with is some sites that would give me real information on what i am actually supposed to be paying, something that details all the expenses i accrue, for example supporting my ex wife and daughter, i presume there is some releif for the things you have to pay.....? or is your total income just considered taxable in France?

Well, you can get a deduction for "pensions" you pay for your ex-wife and daughter under a formal court order. There are limits to how much you can deduct, and there is a restriction that you can only deduct payments that are "basic" (i.e. that go toward necessities of life - food, shelter, clothing). You also need to have proof of payment for anything you want to deduct.

The thing to watch out for is the cotisation part of the equation. That can absorb a big portion of what you're making (because it includes retirement).
Cheers,
Bev

 

[Wobblecat]

Sorry for the incredibly late response but i have been on the road again for a long time....

Out of the blue i received a letter from the authorities stating i had been registered as an overseas resident and if they wanted any further info they would contact me.

Have never received any further info from them....

No idea how they came to this decision and have never been contacted again.

Best regards,

 

[Bevdeforges]

Like they say, "don't look a gift horse in the mouth!"

Take them at their word and get on with life.
Cheers,
Bev