health insurance

[jacques]

My family are planning to move to France from Canada. We hold British passports as well as Canadian.  Our main source of income will be from a company which we own and will remain operational in Canada.  I will be able to accomplish much of the work I do remotely in France plus periodic visits to Canada.  However, for the purposes of health insurance, I am not clear at all whether or not I need to take out private insurance or whether I can opt in to the French system. Can anyone help me with this question?

[AnOther]

To legally operate your Canadian company from France you will have to establish a business entity here by virtue of which you should qualify for health care the same as any other French citizen/employee would.

Even if 100% of your work were conducted online from France to be legal the above still applies.

[Sprogster]

AnOther is correct, in that you need to investigate further the practicality of operating a Canadian business, whilst living in France.

As a matter of interest, why are you thinking of leaving one of the most successful economies in the world, to one going through it's death throes!

[jacques]

Is that necessary?  We would be residing in France, but the company is incorporated in Canada.  I am simply providing management services to the company in return for a management fee.  There will be withholding taxes on that fee and any dividends which are declared in Canada which should be offset against French taxes, however, I don't understand why I would be required to set up a business entity in France simply to continue doing what I do remotely. Is that a requirement for UK nationals, of which I understand many work in England while residing in France?

[AnOther]

Yes.

To legally perform any any work in France, even remotely as you propose, it must be via some sort of official French company or entity.

Working in UK and residing in France, as indeed I do, is an entirely different scenario. Neither is it anything to do with nationality, it's French law which applies to all regardless.

 

[Russethouse]

 One member here explained it very well - if your backside is in France, you pay in France !

[woolybanana]

Following on RH's subtle comment is the corollary that bigger backsides pay more, which must definitely worry some of our members!

[Russethouse]

 Goodness - remind me never to pay French tax then !!!

[mint]

http://www.completefrance.com/cs/forums/2052391/ShowPost.aspx

any relation or just similar situation?[;-)]

[jacques]

what kind of entity would I need to establish to allow me to legally operate my business in Canada from France?

[jacques]

I still hope to participate in Canada's successful economy by continuing to operate my business there.  Just hope to enjoy the fruits of my labour closer to other family and in a less hostile climate!

[jacques]

Thanks for the advice.  I am not sure I undertand why your situation is so different to mine.  From France's perspective, we are both resident in France but presumably contracted and paid by an overseas employer for work performed overseas.  Is your situation different because you are not physically present in France when you perform your work in the UK whereas I would be when I perform my work in Canada?

[AnOther]

If that is directed to me jacques then you've hit the nail on the head. My work is both in the UK and for a UK employer. Your's will be performed in France not Canada.

[jacques]

Hi Sweet 17.  Thanks for the link.  No relation but interesting to know how their situation turned out. 

[jacques]

To AnOther.  Do you have any idea what kind of business entity would be required to allow me to essentially email and phone existing and potential Canadian clients from France? 

[eleve]

Hi Jacques, I'm the one with a similar situation to you. :) I'm posting the main info from my reply to your PM here, in case it's of use to anyone else.

I tried applying with CMU for our family (since my last posts on the forum back in March) but they said there is no way to get anything other than private medical insurance if you are not a salaried employee of a French entity. The lady at the local CPAM desk (which is where I had to go to submit the CMU app) said you'd only need 60 hours of work in the last 30 days in order to successfully submit an application... just FYI.

In the end, my husband decided to register our company in France, listing us as French employees of a Canadian company, which includes paying into the health system here. We submitted a form "E0 - Declaration d'inscription d'une Enterprise Employant du Personnel Salarié et ne Comportant pas d'Etablissement en France".

We do not know if this works yet, since the application has been ongoing for three months with little movement (we've called twice to follow up). But here are the URLs with the info:

The main site:

http://www.urssaf.fr/

The best place to start for english speakers is right here:

http://www.anglais.urssaf.fr/index.php?option=content&task=blogcategory&id=276&Itemid=5493

[misplacedperson]

British tour ops do this kind of thing. The main company is a UK one and they run a French company as well, through which they pay bills etc and employ (very few) staff on French contracts.

[jacques]

Thanks so much for the information.  I do have a couple of questions about this solution, who handles the French payroll charges for your company, and how much do you estimate they will be?  I have heard that they are extremely high in France.

[PaulT]

Always amazes me how some people come on here, ask for advice and then get grumpy because they do not like it.

Perhaps as well, whilst some people might be 'forthright' by nature, is there also the potential for others to become forthright when the person receiving the advice rubbishes it?

Jacques, many of those who replied to you are long standing members of this forum and are pretty clued up on French law - not Canadian, Uk, Outer Mongolia - and part of moving to France has to involve accepting the requirements.

Taxes etc go to running a country that benefits all - and by correctly setting up a French 'branch' of the company you become legal. I understand that not just French builders but those of other nationalities who work legally in France get very annoyed at those who move here and work on the black.

In addition, once you have been a member of this forum for some time you will start to realise from some of the posts that some French officials put their own interpretation on the rules or are ignorant of them.

Paul

[Swissie]

[quote user="AnOther"]If that is directed to me jacques then you've hit the nail on the head. My work is both in the UK and for a UK employer. Your's will be performed in France not Canada.[/quote]

That is interesting - but your main residence is in France, is it? So where do you pay taxes? Coops and others seem to indicate that as 'your bum is in France, you should pay taxes there. Or have I got it wrong- just out of interest.

[AnOther]

It is a basic EU principal that you pay your tax in the country in where you perform the work, regardless of residence. Since for me that is UK, that is where I pay.

I still complete a French tax return but pay nothing because of the dual tax agreement.

Coops point about where your bum is does not apply to people like me but would to the OP as their work would be performed in France.

[Swissie]

Thanks - that is very interesting  - because I had always been told that if you are 'domicilié' in France - you had to pay tax in France - even if your employer and work is in UK. What happens to Health Insurance then?

[AnOther]

Lets not muddy the waters with words like 'domicile' because that is not necessarily the same as residence.

If you work in UK for a UK employer then you have no choice about where you pay your tax and that's about all there is to it.

I'm afraid I do not really know what it is that you are asking about health insurance.

[Will]

AnO is right, where you pay tax is determined by the double taxation agreement between France and Britain. Terms like domicile confuse the issue because they mean different things to the tax authorities in France and UK.

As a general rule, if you are taxed on employment income in UK you are also liable to payment of NI, and this will entitle you to affiliate to an overseas state health scheme under a form issued through the reciprocal health agreement; formerly either the E101 or the 'workers' E106, but now versions of the A1 form.

There are exceptions where you may be liable to affiliate to the French social security system instead of the UK NI system, but the normal rule is as above.

If you are tax resident in both France and UK, as I am and, I think, AnO is, then you declare all your worldwide income in France, and tax paid on your UK income is, effectively, credited against your French tax liability. That may mean there is no tax payable in France, as AnO says, but in our case it affects our French tax bill, which ends up higher than it would be if solely French income was counted. It al depends on your particular circumstances.

Jacques would do well to consult an accountant. Tax and social security charges for a company (even a self-employed individual) can amount to as much as 60-70% of your turnover, depending on the nature of the business and size of turnover. Arranging things favourably can bring this down to 40-45% or so, still a lot, but rather more manageable.

[Araucaria]

The general effect of double taxation agreements for people who work in one country but are resident in another is that you end up paying the higher of the two countries' taxes. For example, if you work in the UK and live in France, you'll pay UK tax on your UK-source income, and you'll declare the same income on your tax return in France because you're resident in France. The UK tax is then available as a credit against French taxes.

If you earn a lot, and I mean a lot, French tax on that income will be more than the UK tax, so after taking the credit for the UK tax you will still have some French tax to pay. The effect is that you'll have paid the effective French rate of tax on your income - part of it to the UK, and part to France.

With lower earnings, the UK tax is usually (but not always) more than the French tax, so the UK tax credit means you have no French tax to pay on the earnings you have declared in France. You've effectively paid (just) the UK tax because the UK tax is more than the equivalent French tax.

UK national insurance and French state insurance payments make it all a lot more complicated though, even though they are effectively taxes, and (as I'm retired) it's a subject I know nothing about.