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Discussion Starter · #1 ·
Within the next couple of months my husband may be getting a job in France (it's a 2-year position).

I currently work for a US-based consulting company that does not have any overseas offices. I am wondering if I can work for my company remotely from France (i.e., telecommuting) and what potential tax/legal issues may be associated with this. Can I just get a long-term visa because my spouse has a job in France and then work for a US company? Do I need to get a work visa from France to do this? Etc.

I noticed that this was a discussion back in 2008, but wanted to know if anything has changed or anyone has had more recent experience with this.

I would love to continue working for my company, however if i cannot, I am just as happy to have a nice 2-year vacation in France...

Thanks for your help!
 

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Hi and welcome to the forum!

OK, technically and legally, no you can't work if you're the dependent on your husband's work visa. It's called being a "trailing spouse" and it's a very typical status. (That's why there are so many US and international expat groups in France - to keep the trailing spouses busy.)

Working remotely is still working - and what counts is where you are resident at the time you are doing the work. To work remotely in France, you need to set up a business entity of some variety (currently popular is the auto-entrepreneur statute) and to pay your cotisations (social insurances). While resident in France, you must declare your world-wide income for tax purposes - both to France and to the US.

OK, all that having been said, you wouldn't be the first person to telecommute "under the table" during hubby's overseas assignment. Just be aware that it is very definitely illegal and will complicate your tax situation vis a vis the US, especially if your US employer continues to withhold taxes, social security and any other benefits just like you were in the US. If the 2 year position includes tax services (as many do) it could be tricky explaining the extra income to the tax people if you want to claim your refund. Don't know what state you're in, but it will also complicate your state taxes while you're away.

If you're absolutely determined - you should talk to your employer about going to a contractor status (i.e. rather than payroll), however I've heard that the IRS is just going into crackdown mode on contractor status (again). Don't be surprised if your employer isn't terribly enthusiastic about paying you as a contractor while you're working remotely.
Cheers,
Bev
 

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I am also new here, anticipating undertaking the same adventure (spouse with a 2-yr appointment in Paris starting in the fall). My company is willing to do a part-time telecommute, but responsibility for figuring out the legal/tax details is on my shoulders. I will keep you updated on what I learn!
 

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Just to add to my previous post - my spouse is going to France on a scientific/researcher visa, which does allow the "trailing" spouse to work in France, regardless of occupation, unlike many other work visa types for France. (Although I fear I will still have to jump these self-employment hurdles to set up my telecommute!)

I am also new here, anticipating undertaking the same adventure (spouse with a 2-yr appointment in Paris starting in the fall). My company is willing to do a part-time telecommute, but responsibility for figuring out the legal/tax details is on my shoulders. I will keep you updated on what I learn!
 

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Discussion Starter · #5 ·
Thanks Bev and Asjones!

I suspected that the "telecommuting" idea might not be legal and would have serious tax implications. My company is currently looking into the topic for me in more detail (e.g., whether we can set up an "office" in France, what the tax/legal issues would be), so if I find out anything new I will keep you posted.

Asjones - my husband's position would also be a researcher/scientist position at a university, so we'll have to look into this visa option too. Thanks for the info!

Let me know if you find out anything new!
 

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Thanks Bev and Asjones!

I suspected that the "telecommuting" idea might not be legal and would have serious tax implications. My company is currently looking into the topic for me in more detail (e.g., whether we can set up an "office" in France, what the tax/legal issues would be), so if I find out anything new I will keep you posted.
Let me just warn you up front that, if your US employer does decide to set up an office in France and employ you through that, it means they will be ponying up an additional 40 - 45% of your gross pay in obligatory social charges (not to mention the initial costs of establishing a French branch). It is usually the deal breaker in situations like this.

You might want to negotiate a bit with them - perhaps to assist you with the process of going the auto-entrepreneur route. It costs them less in the long run.
Cheers,
Bev
 

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Discussion Starter · #7 ·
Just to add to my previous post - my spouse is going to France on a scientific/researcher visa, which does allow the "trailing" spouse to work in France, regardless of occupation, unlike many other work visa types for France. (Although I fear I will still have to jump these self-employment hurdles to set up my telecommute!)

Hi asjones - any luck in determining if you can work for your company from France or are you taking the self-employment route?

My company's accountants/lawyers are going to look into the issue for me once tax season is over, so hopefully I will have more information soon.

Let me know if you have managed to find a helpful source of info though!
 

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Some progress made, but I am also waiting until after April 15 to have more time with the tax advisors.

If you are "sent" to France for under five years, your company can continue to pay into the U.S. social security system, rather than paying the French cotisations. You are then not eligible for the French benefits (i.e. retirement, health care, maternity leave, etc.) and have to provide proof of outside health insurance. (Much cheaper than the cost of the cotisations sociales)
Description of the U.S.-French Social Security Agreement

However, in discussions with my husband's future employer, they have indicated that I would be covered for health care under his employment, regardless of my employment details. Most importantly for us, our kids will be covered and we'll have access to the family benefits after the waiting period. (I'm still suspicious, but they seem confident and are used to doing this paperwork for international families.)

The income taxes themselves are taken care of separately in France - not deducted from paychecks, etc. For the year that I am wholly resident in France, it will be simple (take the foreign income exclusion from the U.S., and just pay income tax to France). I'm meeting with an international tax advisor later this month to discuss how to work out the part-year residency years. We also have some rental income issues, since we will be renting out our home in the U.S.

Anyway, I am hopeful, since that seems simpler than trying to set up as an independent contractor and do consulting work for my firm. (Or trying to get a job in France with my VERY limited French, even with my work permit) But, my firm is gun-shy from having some bad tax experiences with off-site employees, so I have to double check everything! (We currently have a few employees working remotely, but all within the U.S.)

Oh - regarding the researcher visas - in case you haven't gotten an answer on that yet, here is a link with the list of institutions to which the program is applicable, which provide the trailing spouse with a work visa:
Visas for professors and researchers holders of a "protocole d'accueil" - Consulat Général de France à Boston

But we are still on track for an early September move! My older son started French lessons last week, I start this weekend, and we're hoping to hear back on apartments through the Cite Internationale Universitaire soon.

Ann

Hi asjones - any luck in determining if you can work for your company from France or are you taking the self-employment route?

My company's accountants/lawyers are going to look into the issue for me once tax season is over, so hopefully I will have more information soon.

Let me know if you have managed to find a helpful source of info though!
 

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Any Luck?

Hi Ladies,

Any luck with figuring out how to work remotely for a U.S. company? My husband and I just moved to France for his job, and both of our visas allow us to work long term. I can't find any helpful information online or from the consulate about how to set up my work situation.

I've been offered a part time remote position for a U.S. company and they are willing to hire me as an employee or as an independent consultant. What did you end up doing? And do you have a recommendation for a good international tax accountant?

Thanks!
Makeba
 

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Discussion Starter · #10 ·
The consulate had no clue about this stuff (and said they wouldn't comment even if they did) and I couldn't find anyone in France who really seemed to know what to do with this situation. My company ended up hiring a lawyer to do some recon. So here's where I'm at...

I've been working for a US firm from France for about 2 years now (a firm I'd worked for before moving). My company just had to declare that I was temporarily assigned to work abroad and that there was no physical presence in terms of an office, etc.

I also had to fill out a form (form SE-404-2) for France to state that I would continue paying my social security taxes to the US instead of France but that I would pay income tax in France as a resident. I think the max time limit on this was 5 years - I can't quite remember. Though since you're already in France prior to getting the job it might be a little different for you. Note though if you're paying social taxes to the US, you can't take advantage of the French health coverage and have to get private insurance.

I've been winging it a bit in terms of taxes/accountants. I planned to hire an accountant our first year here but procrastinated too long. TurboTax seems to do a decent job with foreign income exclusions, etc. and then I just report my US-based income to France when my husband reports his French income. No visits from the authorities yet. :) But if you do find someone, I'd be interested in hearing about how helpful they are.
 

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Piggybacking onto this thread!

My husband and I are working on moving to Paris in January, via the CeT visa. I'm planning to set up a photography company in France, and I have plenty of questions about that, but for now I'm trying to figure out what to do about my husband... Assuming the CeT visa goes through for me, that will allow him to work anywhere. He currently works for a US company and they are allowing him to work remotely from Paris as an employee (not a contractor). Switching to contractor status is not an option for him, due to some stock options we don't want to lose.

What we're trying to figure out is what, if anything, his company will need to do. They seem to be suggesting that they may have to set up an entity and office in Paris so that they can withhold the proper taxes and all of that, but based on what I've read here, it seems like the smarter and easier thing to do is for my husband to just set up an auto-entrepreneur company in France and withhold/pay the necessary taxes on his own. A) Is that legal? and B) Is that the best option for us?

We're not sure how long we will be staying in France.. Maybe just a few years, or maybe forever. My husband's company provides international health care for both of us. Considering that, do you have any suggestions on what to do about social security taxes? Since I will be setting up a business in France I'm assuming that I will have no choice but to pay them in both the US and France. From what I have read here, it appears that what my husband should do is file form SE-404-2 which will get him out of paying it in France for the first few years at least. Does that sound about right?

Any kind of feedback or advice would be greatly appreciated! The US Embassy publishes a list of recommended accountants in Paris for US citizens (presumably that are familiar with both US and French tax laws), so pretty soon we will be contacting one of them to help us with this process, but anecdotal info or suggestions would be fabulous!
 

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What we're trying to figure out is what, if anything, his company will need to do. They seem to be suggesting that they may have to set up an entity and office in Paris so that they can withhold the proper taxes and all of that, but based on what I've read here, it seems like the smarter and easier thing to do is for my husband to just set up an auto-entrepreneur company in France and withhold/pay the necessary taxes on his own. A) Is that legal? and B) Is that the best option for us?
Officially, to keep your husband as an employee of the company, the employer will have to set up a branch of some sort in France and become a French employer, subject to the French labor laws and cotisations (i.e. withholding). They may be unhappy about that, due to the fact that the employer share of the standard withholdings amounts to about 40% of an employee's gross pay.

There is a deal where a US company can keep a transferred employee on the US social insurance systems for up to 5 years (based on the idea that the transfer is "temporary" and that the employee will be returning to the US). You might ask the employer to look into that, though I'm not sure if it would apply unless your husband was charged with setting up a French branch that would ultimately hire locals.

The AE scheme is limited to about 32K€ of gross revenue a year (after that you have to enter the VAT scheme and he'd have to charge his employer VAT on top of all payments). Besides, it only gets him into the French social system, with no allowances for any US withholdings. In essence, he'd be paying twice for health care and retirement coverage.

We're not sure how long we will be staying in France.. Maybe just a few years, or maybe forever. My husband's company provides international health care for both of us. Considering that, do you have any suggestions on what to do about social security taxes? Since I will be setting up a business in France I'm assuming that I will have no choice but to pay them in both the US and France. From what I have read here, it appears that what my husband should do is file form SE-404-2 which will get him out of paying it in France for the first few years at least. Does that sound about right?
If you set up a business in France and are paying French social insurances (cotisations), then you don't have to pay US social security. (I believe you can pay into the US system voluntarily, if you wish, to maintain your benefits. But it's on your tab - can't be part of the French business' results.)

Re the SE-404-2, see here for more details: Description of the U.S.-French Social Security Agreement It seems to be part of the "deal" I mentioned above and it needs the buy in of the US employer, plus their doing the necessary paperwork in France. The employer may want to contact the Amcham in France to see if they can find more information: American Chamber of Commerce in Paris France

Any kind of feedback or advice would be greatly appreciated! The US Embassy publishes a list of recommended accountants in Paris for US citizens (presumably that are familiar with both US and French tax laws), so pretty soon we will be contacting one of them to help us with this process, but anecdotal info or suggestions would be fabulous!
The consulate lists of professionals in Paris are not "recommended," but rather simply a listing of English speaking professionals offering services geared toward Americans - and this includes the list of accountants. Don't presume that anyone on that list is equally familiar with both US and French tax law - some specialize in one or the other. The Consulate takes no responsibility for your use of anyone appearing on that list. You might also want to consider contacting Amcham depending on the nature of the business you'll be setting up.
Cheers,
Bev
 

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As always Bev, you are a wealth of information! Not really what I wanted to hear, unfortunately, but better to know the truth.

My husband's US salary is right around $91k, so although that will thankfully fall under the US foreign income exclusion, it's definitely way out of the auto-entrepreneur limits, not that that would work anyway based on what you told me. I'll just cross my fingers that they are willing to do the paperwork required to get him set up in France and don't decide to cut him loose!

You mentioned that "the employer share" of the withholdings is 40%.. Is there an additional withholding or payment? How much of his salary should we expect to lose to French taxes?

It's good to know that if I pay into French social security I don't have to pay into US social security.. I had not read that before. Does that mean that if we elect to pay french social security, and both of our incomes fall under the $95k limit, we effectively won't be paying any US federal taxes at al? Good grief I hope so! That would be great news!

I will definitely look into AmCham, I appreciate you mentioning that.

Last question.. It looks like my business' income will likely be above the auto-entrepreneur limits. I might make it under for the first year, but by the second year, if all goes according to plan, it should be well above the 32k limit. I know that this number will vary depending on a variety of factors, but in general, if I'm not in the auto-entrepreneur scheme, how much of my self-employed income should I expect to lose to French taxes and social security?
 

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I wanted to add that I have searched the archives and read several threads on here about takehome pay. Bev I know you have previously suggested takehome will be about 60% when all is said and done, which sounds great, but when I research taxes online for self-employment it feels like the burden is much much higher. Most websites are suggesting 40% for cotisations and then another 25% for income taxes and then another 20% for VAT and then another 8-10% for various other things here and there. I'm terrified that I'm going to end up with an 80-90% tax burden, especially if my business is making 100k+ annually which is the plan. Could this possibly be true? I know I need to hire an accountant to get more specific info and that is definitely coming.
 

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You mentioned that "the employer share" of the withholdings is 40%.. Is there an additional withholding or payment? How much of his salary should we expect to lose to French taxes?
For a regular employee, expect a withholding of about 20 - 25% for "cotisations" (basically social insurances). Technically these are not taxes as such. You settle up for taxes after the end of the calendar with no employer involvement (because you're taxed as a "household" if you're married - no married filing single option).

It's good to know that if I pay into French social security I don't have to pay into US social security.. I had not read that before. Does that mean that if we elect to pay french social security, and both of our incomes fall under the $95k limit, we effectively won't be paying any US federal taxes at al? Good grief I hope so! That would be great news!
There's no "election" to pay French social charges. If you're "tax resident" in France and working in France, then you pay cotisations - unless your employer has you on that special program for "temporary" transfers.

Income tax is a completely separate issue. Again, no "election" where you pay. If you're resident in France for 183 days in a calendar year, you will pay French income taxes. And, as US citizens, you are obligated to file with the IRS every year no matter where on earth you live. You each get a separate Foreign Earned Income Exclusion - but you have to file to get that. And any "unearned" income (interest, other investment income, etc.) is still subject to taxation by Uncle Sam, though you can take foreign income tax credits for amounts you pay to France (or any other foreign government). On the French returns, you also must declare your worldwide income - and precisely how you report it determines what sort of credit you receive from the Fisc if it's an item the US gets to tax. Take a look at IRS publication 54 to give you an idea of how the US side of things works.

Last question.. It looks like my business' income will likely be above the auto-entrepreneur limits. I might make it under for the first year, but by the second year, if all goes according to plan, it should be well above the 32k limit. I know that this number will vary depending on a variety of factors, but in general, if I'm not in the auto-entrepreneur scheme, how much of my self-employed income should I expect to lose to French taxes and social security?
If you're not in the auto-entrepreneur scheme, then you need to establish a French business entity of some sort for yourself. There are all sorts of options. For a single person business, there is the EURL, the new EIRL and others depending on the precise type of business you're in. (Example, there is a separate "statute" for a one-person farming business.)

As a business owner (i.e. with other partners) you can treat your take in the business like salary - and thus would fall into the same 20 - 25% range as a regular employee. If you're considered an "artisan" or a "commerçant" and thus a "travailleur independent" then you essentially pay about 40% of your declared remuneration as cotisations. If your business pays its own income taxes, then there are a couple of different ways to determine your "salary" for tax and cotisation purposes, based on your draw plus any social insurances paid for you by the company and taken as an expense on the company books. When you first set up your business, pay careful attention to the options you elect.
Cheers,
Bev
 

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I wanted to add that I have searched the archives and read several threads on here about takehome pay. Bev I know you have previously suggested takehome will be about 60% when all is said and done, which sounds great, but when I research taxes online for self-employment it feels like the burden is much much higher. Most websites are suggesting 40% for cotisations and then another 25% for income taxes and then another 20% for VAT and then another 8-10% for various other things here and there. I'm terrified that I'm going to end up with an 80-90% tax burden, especially if my business is making 100k+ annually which is the plan. Could this possibly be true? I know I need to hire an accountant to get more specific info and that is definitely coming.
Not sure I ever said 60% for takehome pay. For an employee, cotisations account for 20 - 25% - so figure "takehome" pay of 75%. Income taxes are figured up on a by-household basis after the end of the year. Your family status and the employment status of your spouse, plus your other financial affairs determines how much you might pay in income taxes and is difficult to ball park without knowing considerably more about your situation than we can get into online.

Remember, too, that France relies more heavily on VAT than on personal income tax for revenue. For any sort of business entity other than the auto-entrepreneur scheme, you have to register for and pay VAT, too. Many items here in France simply cost 19.6% more than in the US due to the VAT added to the prices. One of the big advantages of the auto-entrepreneur scheme is that fact that you don't have to mess with VAT. Just about anyone else doing business in France does.
Cheers,
Bev
 

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Thanks again Bev.. I thought I had read somewhere that if you work for a US company, for your first two years in France you can choose whether you pay into US or French social security. Maybe what they meant is that your employer can decide whether to list you as a temporary worker or not. But for our purposes it sounds like we will be be paying into the French social security and not into the US social security. Anyway, all of that is good to know, and I can't tell you how much I appreciate you taking the time to answer all my questions! You deserve a medal for everything you do here for expats!! When I finally get to Paris I'm taking you out for some bon vin! :)

When I say "takehome" what I mean is after all taxes, including income taxes. So not necessarily what's on the paycheck, but what I can realistically spend on rent, food, bills, etc after setting aside all the necessary amounts for taxes.

Auto-entrepreneur sounds great, particularly the VAT exemption, but the income limits on it are pretty dang low. I'm tentatively expecting that I will be setting up as an EI or EIRL.. If I've done my research correctly then it looks like I will get to deduct costs (or 34% if I'm below a certain turnover), then my social security will be ~30% of that, then my income will be taxed at the relevant rates from there. If that's true, that leaves me about 37% in takehome with a third in overhead, or 52% takehome if I have zero overhead. Not including VAT.

I can't figure out if I will have to charge VAT or not. My income will likely be over the exemption threshold, but my clients will almost exclusively be foreigners who would be exempt from paying it, and also I have read on a couple of pages that photographers and other wedding-industry-related service providers are often exempt from VAT. I'll need to look into that with an accountant, I guess.

Sorry for hijacking this thread!!! It's crazy how difficult it is to figure out how much of the money I make I'll actually get to keep!
 

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I can't figure out if I will have to charge VAT or not. My income will likely be over the exemption threshold, but my clients will almost exclusively be foreigners who would be exempt from paying it, and also I have read on a couple of pages that photographers and other wedding-industry-related service providers are often exempt from VAT. I'll need to look into that with an accountant, I guess.
Um, perhaps you don't quite understand how VAT works.

Foreigners are NOT exempt from paying VAT. VAT is charged on all merchandise and services (unlike with sales tax in the US). When you are dealing with a service, VAT is charged based on where the service is performed - not where the receiver of the services is resident.

Simple example (from the company my husband and I own): If we sell merchandise to a foreigner and s/he takes it out of the country (filing the necessary paperwork on their way home), we don't have to charge them VAT.

If we perform services for them while my husband is physically present in France (we do computer stuff - much of it online), then we have to charge them the full 19.6% VAT unless DH flies to their country to perform the services.
Cheers,
Bev
 

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Oh I DEFINITELY don't understand how VAT works.. Pretty much the extent of my knowledge is that I usually get big chunks of it refunded when I travel abroad, so I assumed foreigners were exempt. Your explanation definitely makes sense though, and certainly makes it highly likely that I would indeed charge VAT. I do wonder why I've read a few sites saying that many wedding vendors don't charge VAT though.. Perhaps they run very small businesses and haven't hit the threshold. Or perhaps they are like so many US wedding industry vendors and run an illegal cash business under the table (boo!!).

Thanks again for all your help!
 

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OK, there is the VAT rebate when you visit France. (Though you'll note that you only get about 13% or so back - the VAT rate is 19.6%.)

The way that works is that you have to show that you are resident abroad and then you also have to show that you are taking the goods with you when you leave. For merchants, we're able to not charge VAT provided we have the proof that the goods are being exported on sale (basically, paperwork).

VAT is basically a form of sales tax, only once you get used to it, it's actually much simpler than sales tax (IMO anyhow). You charge your customers VAT on all purchases (except goods for export) and then you deduct all VAT you pay on things you buy for your business. You wind up paying only the difference to the tax people.
Cheers,
Bev
 
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