[ydukes]

Looking for a tax account or someone who can give me advice on French taxes. We are Americans with a long stay visa and our appointment with the OFII to get our carte de Sejour.
We read that if one files French taxes and pays tax that it is possible to get on the social security health system. Our thoughts are that if we bought a house with a rental apartment or bedroom, we could pay French taxes on that income and possibly end up with healthcare through the system.

 

[NickZ]

Nobody else answered.

It sounds like you think you can choose your tax residency. It also sounds like you think only French income would be covered.

https://www.cic.fr/en/bank/personal-banking/settling-in-france/tax-system-in-france/index.html

Are you a tax resident of France? | Kentingtons, Tax and Investment Consultants

Read those two.

 

[ydukes]

Tax residency

Nick, i am not suggesting that i can chose my tax residency. I do know there is a tax treaty between the usa and france and that if i file taxes here, it is unlikely that i will owe taxes on income other than that earned in france. So my thinking has to do with creating taxable income in france to enable myself to pay social taxes and hopefully get onto the french health system. We pay a fair amount for global health insurance and still have a high deductible, etc. I would rather give the money to the french government and be a part of their health system.
I read the articles which were helpful to a point. Any more advice?

nobody else answered.

It sounds like you think you can choose your tax residency. It also sounds like you think only french income would be covered.

https://www.cic.fr/en/bank/personal-banking/settling-in-france/tax-system-in-france/index.html

are you a tax resident of france? | kentingtons, tax and investment consultants

read those two.

 

[NickZ]

I do know there is a tax treaty between the usa and france and that if i file taxes here, it is unlikely that i will owe taxes on income other than that earned in france.

France like most countries taxes on worldwide income. Unless the income is exempt under the treaty they'll want a crack at it.

Basically civil service pensions and military.

Investment income will still be taxed by the French. I can't remember what the current rate is but it might be equal to the US withholding so a wash. But you would have to pay the contributions on this income to. 10%???

Looking at the link again it's under property income first link.

 

[NewMexicanMove]

Beware of the cotisations if you go into the health system... you'll pay about 8-10% of your last year's (worldwide) income if you go into the French healthcare system. Depending on your level of income, that may be fine. Or it may be far cheaper to get private healthcare (check out AARO, for instance).

Also - if you start paying French taxes, you will pay on world-wide income. You'll pay your US taxes, and then pay the French the difference between that and what you would have paid under the French system. PLUS, again depending on your assets, you might be liable for ISF - wealth tax, if you have more than $1.3M (I think) in worldwide assets. Not hard to do if you have real estate and 401ks, which are not excluded from this tax, even though they're essentially pension plans. Francois Hollande intends to ramp that up hard this year. Supposedly it's a one-time deal... but now he's saying it may go on as long as the recession continues.

We were planning to become resident in France this year - we've now decided to stay as US residents, just spending part of the year in France, because of the potential tax burden. We're not particularly wealthy, just comfortable professional class by US standards, but the risk/cost is too great, according to all the advice we're getting. I was ready and willing to pay more tax than in the US, but only to a certain point. (Apart from anything else, I'm expecting a one-time settlement of a lawsuit in the next year or two - if I became resident in France I'd probably have to give 75% of it to the French government. I don't think so.) A dentist chum here on the west coast of France was telling me yesterday that several of his clients - again, not mega-wealthy, just average professional folk - are moving offshore because they're getting so rattled by what this government is doing.

Also - take a look at the capital gains and tax implications of having property/rental property here. Hollande just hiked capital gains - you'd need to keep any property for at least 5 years to avoid punitive tax. Plus once you have tenants in, they have significant rights that can be very problematic for a landlord - it's nothing like renting in the US. I also gather there are new regulations limiting your ability to set rental amounts.

Don't want to discourage you, but just to say you really need to do your homework. Check the US Embassy website - there's a list of accountants and such. You should be able to find someone there to give you advice. It's a real swings and roundabouts deal.

 

[Bevdeforges]

Not sure the situation is quite as dire as NewMexicanMove paints it - but that does depend a bit on your exact circumstances and income level.

Still, to get into the French health care system, I believe you'd have to be doing your rentals as a business, not just a casual rental on the side. Then, you would need to meet a certain minimum level of contribution as part of that business. Depending on what sort of visa you're on, you may or may not be able to set up your rental activities as a business and make the required minimum contribution as "employees" of that business. You also can't pick and choose which "contributions" to make. As a business, you'd pay into both the health care and the retirement system - with scant chance of getting anything back on the retirement portion (which is by far the largest part of the cotisation payments).

There is also the dual taxation issue. You pay US taxes based on your worldwide income, which would include your rental income in France. You're only allowed a tax credit for the taxes paid on that income - so if the US tax rates on your French rental income were more than what the French charge in taxes, you'd pay the difference to the IRS.
Cheers,
Bev

 

[NewMexicanMove]

I didn't mean to come across as alarmist. For most folk, on average incomes, nothing much has changed. And if one's on an above average income, things have changed to an uncertain degree - but in that situation one can't really talk about life being dire! But one should be aware that most of the stuff that's written on the web is by average earners. So if you're fairly well off, and don't do your homework, you could get seriously blind sided.

The original poster appears to be living in France without having to work, and able to pay for private health insurance. Hence I infer she or he may well be in the position where a spot of professional advice (which they're seeking) could save them a lot of problems later on. There are a lot of swings and roundabouts.....

 

[Bevdeforges]

With the new government and all, there are lots of issues up in the air. We've been "promised" all sorts of stuff come the Rentrée - though it remains to be seen how quickly some of this stuff will come about.

France is well known for passing last minute changes to the tax code in November or December of the year in which the changes are to apply. (Adds new meaning to what I was taught in business school about never making any business decision "for tax reasons" alone.) Just recently, too, I saw something on France 24 in English about "simplifications" to the immigration laws that are supposed to be coming this fall and winter - supposed to encourage immigration, at least of those with needed skills.

Hollande has promised lots of people lots of stuff. But when and where it comes about, I guess we'll just have to see.
Cheers,
Bev

 

[ydukes]

Thanks, your assumptions make sense. We regrettably are not well off but better than average as long as we are frugal here in France. It is a lot to consider so I will search out a good tax accountant near Luchon if possible.