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Discussion Starter · #1 ·
I was wondering if anyone knows of a good tax consultant. I will have to file French taxes this coming year and will need some help.

If anybody is interested in my situation and would like to advise, please read on. I work in France for an organization that has contracted my work through a US company. That US company pays my Canadian company (which I solely own). The Canadian company pays me a salary (which I keep to a minimum).

When it comes time to file a French tax return, what will the French tax be based upon? I'm guessing that they must tax me based on my personal income, i.e. the salary that the Canadian company pays me, plus any other personal income, interest, dividends etc.

Now to complicate matters. I would like to buy a house with my girlfriend here in France. She is an EU resident. For me to put down a portion of the down payment, I would need to take some money out of my company, i.e. I will have to pay myself a higher income this year. Therefore, if the statement above is true, my French tax will be higher during the year that I increase my personal salary. However, I will be carrying a mortgage here in France. Are mortgage payments a tax credit here in France?

I'm pretty sure there is a tax treaty between France and Canada but I would like to be certain. Can anyone verify this?

Thanks
 

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As a French resident, you are obligated to report your worldwide income to the French tax authorities. There is a tax treaty between France and Canada, so you shouldn't wind up paying double taxes, however you need to be careful how you report your income to both tax authorities.

In general terms, you report all your worldwide income on the French forms and then there is a separate form for foreign income by type. If you're taking dividends (for example) from your Canadian company, you report the dividend on the international form and the tax inspector who handles your form is supposed to give you the appropriate credit based on the tax treaty with Canada.

Your salary counts as French income and you should be paying French cotisations (social insurances) on that salary since you are physically located in France while performing the work.

As far as finding a tax advisor, you may want to consult your consulate in France to see if they can give you a list of dual qualified tax attorneys or tax accountants (Canada and France).
Cheers,
Bev
 

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Discussion Starter · #3 ·
Bev,

Thanks for the reply. Things get complicated for me in understanding "Worldwide wealth" and "Cohabiting couples". I currently live with my girlfriend who works for an international project and is 'Tax exempt" (she pays taxes to the organization, not to the French gov't). We do not have any typical documents that would illustrate we are 'cohabiting'; no joint bank accounts, rental apartment is in her name, etc.

Talking to my colleagues, they tell me that a combined single tax filing is only required if you are married. However, when I read about the ISF tax, it mentions Cohabiting couples. If cohabiting couples applies to both ISF and income tax, then the confusion sets in due to my girlfriends tax exemption status. Do we file a single tax return for both of us? How would that work if she is tax exempt and I'm not? If we still file separate tax returns, and I declare that I'm a cohabiting couple, do I have to add her 'wealth' onto my tax return?

To complicate matters further, we wanted to buy a house together here in France. A mortgage will certainly prove that we are cohabiting. How will this impact our tax situation?

As you can see, I'm in desperate need of a good tax consultant but any advise from people with experience would be greatly appreciated.

Regards.
 

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Unless you and your girlfriend have gotten PACS'd or married you're not in a recognized relationship for French tax purposes. What you saw about "cohabitation" may have actually been a reference to the old informal arrangement for unmarried couples (concubinage) - though even that used to require registering at the local mairie and it didn't allow you to file tax returns together.

On the tax issues, you are required to file a joint tax return if you are married or PACS'd, otherwise no deal - you MUST each file a separate return. There is no option to file jointly. That is supposed to be the same for the ISF. (One of the big reasons Segolene Royal and her partner François Hollande never got married is that Segolene had to file ISF due to an inheritance and Hollande didn't want his property subject to the tax. They not only co-habited, but had 4 kids together.)

I'm not sure what the banks will do about making a mortgage to unmarried partners, but you won't receive the same benefits as a married or PACS'd couple would in terms of inheritance rights. You may want to look into buying property together under an arrangement that would essentially allow you to own shares in the property to keep the interests separate.
Cheers,
Bev
 

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Discussion Starter · #5 ·
Thanks Bev.

We have an appointments with a notaire, bank representative, real estate agent etc. If we discover any information that we think would be useful to other Expats, I'll be sure to post it.
 
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