UK registered business

[Sweetpea]

It has probably already been covered, but ..............

if I have a UK registered business which makes money in France, do I have to pay tax in both countries?

Merci d'avance

[Will]

The answer is basically no, tax is normally paid in the country where either the work is carried out or where the income arises, because there is a dual taxation agreement between the two countries. However, this means that you are not taxed twice on the same income - in cases where a tax is applied in one country and not in the other, or where significantly different rates of taxation apply, you can end up paying some tax in both countries on the same thing.

It can be a very complicated subject, so to get detailed information you need to speak to a good financial expert.

[hardhat]

if you make your money in france you should be french regesterd its illeagle not to be,you can get a wacking great fine and end up having tax bills in both countries with a lot of sorting out to do,

[Sweetpea]

Thanks for that!

I am totally registered in France (ask the taxman and French accountant!) but as Agent Commercial, and with the new laws here, I have heard that if my business were reg'd in UK I would still be able to assist with house sales - it's a minefield!

[mascamps.com]

If you are an employee of your UK company AND you are employed by it in France, you don't need to be registered again in France as per European freedom of movement legislation.

 

Arnold

 

[Steve MD@+<br >Steve<br ><a target=_blank href="http:www.webvivant.com">www.webvivant.com<a>]

If it is your own UK company, you might also like to consider paying yourself dividends rather than a salary - it can work out cheaper in terms of UK taxes. But get professional advice.

[Lavie]

Given Mr Browns recent implementation of tax at 19% on every sum withdrawn from a UK Ltd company, paying a salary by dividends is, unfortunately, nowhere near as beneficial as it used to be. 

[Teamedup]

mascamps, I don't think that the french would quite see it like that.

[Lavie]

[quote]mascamps, I don't think that the french would quite see it like that.[/quote]

"mascamps, I don't think that the french would quite see it like that. "

Quite. They insist on you setting up a french based subsidiary to the UK office. So an owner managed ltd company ends up with two offices paying two taxes etc!

 

 

[mascamps.com]

I agree that they certainly prefer not to see it like that and indeed are taking steps to attempt to block European legislation that would allow you to set up a service industry in one country and offer services directly in another. However, the relevant bits of European law are enacted in their own legislation.

There is a (I think) two year limit that applies to employees of a non-French European company working in France but that limit doesn't apply to the companies doing the employing. Similar legislation applies to pensions so that if you already have a UK (or any European) pension scheme before you move to France, then they can't compell you to join the French scheme. This part definitely works as one letter from me referring them to the specific European law put the brakes on what would have been, by now, a stream of threatening letters from the French pension people.

 

Arnold

 

[mascamps.com]

I don't believe that they can insist on you setting up a subsidiary company here anymore. In the past, some years ago, yes. But not as of something like a couple of years back (I'm not sure of the exact date).

There would be some differences for owner-managed businesses where, in effect, the company was relocating to France. I imagine that in practice the two year limit would apply.

 

Arnold

 

[hardhat]

i get the fact that all this topic is based on the fact some one wants to pay as little tax on there income as possiable,great thats what we all want isnt it.but does that mean if i break my leg i have to ring a british ambalance,if my kid as appendicites i have to get in the car and drive 14 hours to dover,if the house gets robbed i doubt very much if you will get any satisfaction ringing 999,i think its laughable your prepared to pay tax for someting you cant have and cant use but wont pay tax for what your getting here.  

[hardhat]

i get the fact that all this topic is based on the fact some one wants to pay as little tax on there income as possiable,great thats what we all want isnt it.but does that mean if i break my leg i have to ring a british ambalance,if my kid as appendicites i have to get in the car and drive 14 hours to dover,if the house gets robbed i doubt very much if you will get any satisfaction ringing 999,i think its laughable your prepared to pay tax for someting you cant have and cant use but wont pay tax for what your getting here.  

[Lavie]

[quote]i get the fact that all this topic is based on the fact some one wants to pay as little tax on there income as possiable,great thats what we all want isnt it.but does that mean if i break my leg i hav...[/quote]

Not at all. The first post was asking about paying tax in both countries and later sweetpea said he/she was already legally registered in france. So i don't think any-one is trying to avoid taxes.

[LynneG]

[quote]If you are an employee of your UK company AND you are employed by it in France, you don't need to be registered again in France as per European freedom of movement legislation. Arnold[/quote]

I am currently working on a book relating to anglo/french business and it's pitfalls.   My research in both the Uk and france has shown this to be a much quoted error.

If your UK business conducts more that 30% of it's work in France then you are required by French law to register and have a siege social in France.

However, SweetPea, as may anyone else, can register as a Agent Commercial for a business.

The role of an agent commercial is as an intermediary between one company and a customer. If the commercial agent is also a party to the company or has a fiduciary interest in it, then he/she ceases to be an 'Agent' but, in reality the representative of the company itself.

Also, another misconeption is that registration as an Agent Commercial is a green light to advertise or sell properties in France.  This, is according to FNAIM, becoming an extremely hot potato for the Immobilier busines, particularly in relation to British people purporting to be 'Property Finders' but, in truth, acting as agents and therafter having their 'commissions', not properly recorded on the Acte de Vente and paid outside of France.

The final issue is one that may have huge consequences for any British buyer who has bought through an UK agency or Agent Commercial since 1 January 2004 and, who has paid money privately in the United Kingdom which was not declared in the Acte de Vente. My information is that there is a bi-lingual Brigade, currently working in Manche and Brittany who are sweeping through Immobilier offices removing files where Brits have bought properties and intermediares/translators may have been involved or present.

European Law may say what it likes.  I am afraid, the french system has little regard for this and quoting any EU treaties in the gendarmerie will not help.

Great here isn't it?

[Richardbk]

European Law may say what it likes.  I am afraid, the french system has little regard for this and quoting any EU treaties in the gendarmerie will not help.

This is simply not true if you know how and where to get assistance. 1) Gendarmes do not work for the prosecution , as in the UK, 2) the European Commission has various assistance and lines for complaints to ensure that directives are upheld. They will take up the case directly with the relevant French department without cost to you - and if necessary they will take the case to European court - again without cost to you. The main thing is to be sure you understand the scope of EU legislation - anything not covered will come under national law.

In respect of the original question. If it is a registered Ltd company, in the terms of company law, company taxes, accounts etc, the law of the country in which the company is registered is the governing law. There is a recent case history in the European court on this. However,for employees, tax and social charges depends on where they have their 'bum on the seat' when doing the work and/or where you reside for the majority of the year.

The additional complication of one man band companies is that most EU countries are still able to lump these together - I.e the companies earning are in effect your earnings - I.e as the UK as done in relation to one man band Ltd companies and IRS35 - which has in effect killed the possibility for these people to pay themselves large 'salaries' in dividends. If you live in france, work in france for your own UK company, with no other work/employers in other countries you will indeed have to be registered in France. You will be treated as operating an offshore company and all earnings will be attributed to you individually.

BTW The new proposed European Commission Bolkenstein directive  aims to remove all these barriers, such that a company may work anywhere in the EU without the need for local registration and carrying the salary and social contributions of the country of registration - hence this is causing big reactions in France at the moment e.g the unions/socialist see it as the collapse of France and its social structure  For some reason they have also linked this to saying NON to the EU constitution , but in fact the constitution has nothing to say on this and in fact would enable France to have a bigger say in creating a common corporate framework (i.e watering down such directives) - hence why the brits are against it

regs

Richard

[LynneG]

[quote]European Law may say what it likes. I am afraid, the french system has little regard for this and quoting any EU treaties in the gendarmerie will not help. This is simply not true if you know how ...[/quote]

Richard, that was really informative, thanks.  However, I know of a number of people who have been taken into the Gendarmerie and placed 'garde en vue' for up to 4 hours whilst they are questioned by the Gendarmes.

Throughout the procedure, the Gendarmes remain in constant contact with the procurator, advising him of any responses to questions and information given to them.  The Gendarmes certainly do not act as arbitrators or seekers of the truth. They are there to put their findings to the accused and to record their answer.  I think that might be akin to working for the prosecution.

The bums of seats comment is wholly correct and appears to be the main thrust of the gendarmes local investigation on Brit settlers in this area who are working for their own UK company.

So, what directive/regulation/treaty etc does the UK director, living and working in France quote to the gendarmes when nicked?

But thanks for all the info so far.

[Teamedup]

I obviously haven't got this LynneG.

I thought,if someone who is a UK director and is living and working in France, surely has their bum on their seat in France and should be registered in France.

[mascamps.com]

The person would need to be registered, his/her company wouldn't.

There is also leeway for "temporary" work in France not requiring the person to be registered. As far as I know, "temporary" means a maximum of two years.

 

Arnold

[Lepoulailler]

Do you just assist with house sales or are you an a/c who does  mandates etc?  I ask because I have recently worked through a similar minefield via the Chamber of Commerce, URSAAF etc.  Because I work privately for my own customers and also help a UK company with sourcing suitable properties for clients, subsequent translation and relocation issues, but don't mandate houses, or act as an estate agent etc (my remit actually goes much wider because I specialise in equestrian properties, and help with installation of arenas, stables, equestrian insurance, competition licences, horse sourcing etc...), they have actually registered me as a consultant.  Don't know if would apply in your case, but it might be a good starting point.

Peta

www.lepoulailler.net

[Sweetpea]

I am registered as A/C so mandates arent a problem. But with the new laws (as far as I can make out) I am no longer allowed to take a percentage of the commission, unless I claim 10% as apporteur d'affaires (ie I provided the client) The other 10% which I used to be able to claim will now be obsolete (again, as far as I can surmise!)

I was advised that if I set up a UK company with only myself as director, I could claim the other 10% for services rendered/translating, etc.

It seems a very odd way of going about things, hence my original question!

And how will other, French national A/C's get around it???

It is SOOOO complex!!

[Lepoulailler]

Complex isn't the word, is it? Aargh...

I think it varies a lot from region to region as well. It took me months to get to this point, because in our area they are now refusing all new applications for Agent Commerciales Immobilier and are knocking back any renewals.  (In fact my friend neaby had his renewal application approved by the same office, so I guess it also varies according to the interpretation of individuals!). A/C status is still fine if you want to sell vaccuum cleaners and the like, but in immo you must be able to prove that you have more than one contract, in which case you have the evidence that you are truly independent and self employed. 

As I understand it (and I'm not sure I truly understand it) but part of the aim of the legislation is to protect A/C's who by the nature of their work act solely for one agency.  The argument goes that if that is the case, then they should be protected by the law and paid a wage, with all the sickness, maternity, pension entitlement etc that entails.... (Ooh, a salary - that sounds quite nice actually, now I come to think of it)

I believe that there is nothing to prevent a consultant from basing their prices upon a percentage of the commission.  They can't however mandate houses, the work would need to be very much translation, handholding, before and after sales service etc....

Quite a lot of A/C's seem to be going down this route (I've spent weeks phoning round and asking), many others are now starting to charge their percentage directly to the client as a 'finders fee'.  And quite a lot of others are now being taken on and paid a wage by the agencies they have worked for for many years.

I also looked at the possibility of setting up in the UK, but was advised by my accountant that if I lived in France and my business was based in France then (quite correctly) I should be running a French business with all that that entails.

A bureaucratic nightmare...

Peta

www.lepoulailler.net

 

[Richardbk]

Throughout the procedure, the Gendarmes remain in constant contact with the procurator, advising him of any responses to questions and information given to them.  The Gendarmes certainly do not act as arbitrators or seekers of the truth. They are there to put their findings to the accused and to record their answer.  I think that might be akin to working for the prosecution.

The difference is that it is the gendarmes do not seek out the evidence, without the direction of the prosecutor. The role is quite different, which is often why many gendarmes don't actually know much of the law, except the basics.

So, what directive/regulation/treaty etc does the UK director, living and working in France quote to the gendarmes when nicked?

If course it depends what your in for - If you have a legit setup and are not trying to dodge the tax and and social costs then you have nothing to fear. However, in my experience  few foriegners seem to understand french employment laws in respect of trade registrations, director obligations/liability and delit de marchandage(even French companies have problem with this one). These are probably the biggest problems for legitimate companies and many can and do lead to custodial sentences.

regs

Richard