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Impots, don't ya just love em


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Just returned from a trip to the Impots to file my tax forms. Do the

right thing I thought, take the time to speak to somebody to make sure

I'd got it right and also what the exchange rate was, 0.849, or 1.17 if

you prefer, although it didn't stop them telling another English lady I

met there being told 1.04, but that's another subject !

Waited

patiently to speak with their 'English' lady who first off told me that

I needed a letter from my Mairie stating that I was French resident.

Asked why I needed this for my second year declaration she simply said

whoever didn't tell me that last year was wrong.

Next she

decided because my salary was not a UK government one that it was a

private income and therefore subject to French tax and I would have to

pay and claim it back from UK.

Again asked why last year this was

not the case, despite the fact that that form was filled in by one of

their own people, same answer, whoever did that was wrong.

When I further argued she got out the convention and after much searching quoted me from Article 15 which I have included below.

ARTICLE 15 (SOURCE)

 (1)

Subject to the provisions of Articles 16, 18, 19 and 20, salaries,

wages and other similar remuneration derived by a resident of a

Contracting State in respect of an employment shall be taxable only in

that State unless the employment is exercised in the other

Contracting State.  If the employment is so exercised, such

remuneration as is derived therefrom may be taxed in that other State.

(
2) Notwithstanding the provisions of paragraph (1), remuneration

derived by a resident of a Contracting State in respect of an

employment exercised in the other Contracting State shall be taxable

only in the first-mentioned State if:

(a) the recipient is present

in the other State for a period or periods not exceeding in the

aggregate 183 days in any period of 12 months; and

(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

(3)

Notwithstanding the preceding provisions of this Article, remuneration

in respect of an employment exercised aboard a ship or aircraft in

international traffic may be taxed in the Contracting State in which

the place of effective management of the enterprise is situated.

To my mind she is completely and utterly wrong on 2 points.

Firstly

she is misinterpreting paragraph 1 by ignoring the part which I have

highlighted, and secondly is confusing private incomes such as interest

from savings etc. and UK state pensions with a UK salary but I'd

welcome anyone elses take.
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Can't help you, Erns, sorry.

I have my own problems with them though they aren't as bad as yours.

Like you, this is our second year.  No forms, so went to the local Tresor to get them to print them out as I think I'm still recovering from the trauma of trying to use their site last year.

Forms printed but still our address shows up as the UK one.  This is despite about 4 visits last year to the Impots and 4 visits to the Tresor to try and get our address changed.

Not only that, still awaiting the decision on our TH and TF (neighbour's property included with ours and had to convince them that we only owned the one house and not both houses) and, moreover, we were non tax payers last year on account of moving here full time for only part of the year before and also didn't receive any investment income until last year.

This year, there will be tax due.  Would be happier paying if I could get the UK tax people to pay OH's annuities gross of tax and for them to acknowledge that we are now French tax payers and refund all the taxes they have taken from us for the previous 2+ years.

I guess tax offices are tax offices the world over.  Forget efficiency, just prepare yourself for the ensuing battle (of wits and words) and remember, if you weren't overpaying, how would the politicos get their expenses paid?[:@]

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You said that you dealt with their "English lady" so I assume that the conversation was in English, did she find an English translation of the convention for you as well?

If she did I hope you realise just how lucky you are, but on the other side of the coin the fonctionaire mentality does not change when the discourse and the documents are in English.

To further clarify things is the income in question from savings dividends etc (in which case it is not renumeration) or from employment?

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Ernie

Double Tax Conventions use a particular languange which isn't always quite the same as English, but they nearly all have much the same meaning, and this is a typical employment article as found in lots of the UK's (and France's) tax treaties.

I can't entirely work out from your post here what your situation is (if I delved back into your past posts I could probably work it out). But if your situation is that you have an employment in the UK and you are resident in France, then that bit of the tax treaty which you quote means that, if they wish, both the UK and France can tax your employment income. It doesn't always mean that they will actually do so. That depends on the tax law in each country which can change from time to time: the treaty just gives both countries the right to tax the income if they want to. But if both countries do decide to tax the same income (and I rather think they both do), then another article of the tax treaty gives you the right to set the UK tax you pay on your employment income against the French tax you will owe on the same income. There are usually various restrictions on the amount of credit you get.

The bit you have highlighted starting "If the employment is so exercised..." and saying that the other can country (the UK, in your case) can tax the income, doesn't say, and certainly doesn't mean, that France can't tax that same income too. The key word in the first (unhighlighted) part of paragraph 1 there is "only" as in "taxable only in that country" (France, where you are resident). If you perform the duties of the employment in the UK it's taxable there too.

Where you meet the conditions you have highlighted, you won't get the UK to pay the tax back to you. They will work out the amount of tax by giving you any allowances you're entitled to, but they keep the tax, and France then gives you the credit for it. Eventually.

Was that what the lady at the tax office told you? Or was it something else?

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Three or four years ago, I tried to do the right thing and check with the resident impots experts that we were filling our tax return correctly.

Since then, I am continuing to fill it the way they (I say "they" because I saw several people, the last one being the big boss, who also quoted out of his bible to me)  decided we should do it. It means that every year, we fill our tax return wrongly. One mistake that works against us, and the other one that works for us. I have stopped trying to argue, after an exchange of letters which did not lead anywhere. I know I could have taken it even further, but I figured that it mostly works out overall. Or not.[8-)] All this was done in French, which is no problem for me, and should be no problem for them.

But it is crazy. Each Hotel des Impots, a law onto itself.

I feel really sorry for those who don't have the advantage (?) of fluent French to deal with some of the inexplicable variations.

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Thanks for the replies all.

Ah but sweets, life was never meant to be simple was it !

JR: English lady was reading from the French book so gave me the translation according to her, I noted the section and looked it up on t'internet. Income is remuneration from my employment. Other income from UK savings and investments is practically zero this year.

Arucaria: my situation is that I work offshore UK for a UK company paying UK NI and PAYE tax. The UK taxman is quite firm in his stance towards me in that if I work in the UK sector for a UK company then I pay UK tax - period. I did at one time seriously consider relocating to IoM to take advantage of the tax rates there but following a consultation with a tax expert where it emerged that it would be nigh on impossible to escape the clutches of HMRC that idea was abandoned.

I agree that the wording can be interpreted either way but what is irritating me is being told something so profoundly at odds with last year. I don't mind paying my dues, (that's a lie actually [blink]), on either side of the channel, but having already paid up in UK, and it's not an inconsiderable amount either, to be forced to pay it again and go through all the hassle of claiming it back, if that's even possible in my circumstances, is not an option I'm willing to accept without a fight.

LATER:

After chilling out in the pool I've just come off the phone with HMRC who've confirmed that my tax liability is with UK and have advised that if the French dig their heels in I should write to them detailing the problem and that they would then contact the French directly on my behalf.

Frankly I'm tempted now just to fill in my form exactly as the lady at the Impots did for me last year- and told me I should do this, even taking the trouble to photocopy last year's forms for me to show where the figures went, and sit back to see what happens.

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[quote user="ErnieY"]

Arucaria: my situation is that I work offshore UK for a UK company paying UK NI and PAYE tax. The UK taxman is quite firm in his stance towards me in that if I work in the UK sector for a UK company then I pay UK tax - period. I did at one time seriously consider relocating to IoM to take advantage of the tax rates there but following a consultation with a tax expert where it emerged that it would be nigh on impossible to escape the clutches of HMRC that idea was abandoned.

I agree that the wording can be interpreted either way but what is irritating me is being told something so profoundly at odds with last year. I don't mind paying my dues, (that's a lie actually [blink]), on either side of the channel, but having already paid up in UK, and it's not an inconsiderable amount either, to be forced to pay it again and go through all the hassle of claiming it back, if that's even possible in my circumstances, is not an option I'm willing to accept without a fight.

[/quote]

Ernie

I think if you are resident in France you have to pay French tax on all your earnings unless they are actually exempted by the tax treaty with the UK (as, for example, government pensions are). The UK taxman is right in saying you have to pay UK tax (there are special rules for offshore workers as I am sure you know). The UK taxman, however, will have almost no idea of what the French rules are, and you should treat anything said by HMRC about French liabilities with a degree of caution.

The UK-France tax treaty gives you the right to set the UK tax you pay against the French tax on the same income: it reduces your French tax liability. That's not the same as "claiming it back". The UK won't repay it.

And I don't think that the wording of Article 15 of the tax treaty can be interpreted either way. It means exactly what it says and it doesn't say that the French don't have the right to tax your UK employment earnings. If it would help to see the difference I'll dig out the wording of one of the other articles in the tax treaty that really does exempt French residents from French tax on income that's taxed in the UK, and you would see the difference in the way they put it.

PS - dealing with the practical effects of the UK's and other countries' tax treaties used to be my daytime job ......

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[quote user="ErnieY"]Thanks for the replies all.

Frankly I'm tempted now just to fill in my form exactly as the lady at the Impots did for me last year- and told me I should do this, even taking the trouble to photocopy last year's forms for me to show where the figures went, and sit back to see what happens.
[/quote]

Having selective memory can often work to your advantage.

In circumstances where I have come up against the "this is my interpretation therefore the other advice must be wrong" syndrome in France I have explained that if the other person were to be here they would say that you were wrong, one of you must be right, I would like to ask your chef to confirm which of you it is.

It has usually ended up with a decision, normally confirming the current incumbents opinion unless the boss has a downer on them and always the boss has refused to confirm it in writing.

Selective memory works best for me, I went into the Tresorie Publique this afternon and the two people before me were asking advice on their declaration des impôts and one of them said that they were told the opposite last year, you are not alone.

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I note that Ernie Y waas told by his local tax office that the tax exchange rate was 1.17, and another English lady was told 1.04.

I wonder if anyone has asked the local Bressuire (Deux-Sevres) Impots what average exchange rate they will accept?

Thanks,

David

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[quote user="J.R gone native"]

Selective memory works best for me, I went into the Tresorie Publique this afternon and the two people before me were asking advice on their declaration des impôts and one of them said that they were told the opposite last year, you are not alone.

[/quote]  Why would anyone go into the Tresor Publique on a tax query??  Do they go in the butchers for their bread?  The Tresor Publique collects money, does not changes addresses or give tax advice, that is the job of the Hotel Des Impots, well it is where I live.[geek]

David  Declare your income at whatever rate you think is correct, you know what it really is.  So what if a tax official quotes 1,04€, we all know its not correct unless its for a year end receipt from the UK.  However I'm sure that will not stop people using 1,04 € and quoting this tax official or that to justify it to themselves, and then at the next moment rant at the UK TV because some MP followed advice from the Fees Office also knowing what they were being told was really morally incorrect.  Be interesting to see how many will grasp the year end rate next year[Www]

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Can't let your post go unchallenged, Ron.

I know, as well as you do, the function of the Tresor Publique as opposed to the Hôtel des Impôts.  I go to my tresor for help because it's nearer to me and I have also had help with their writing letters, making phone calls etc for me to the Impôts.

Not only that, I am known in my small community and everyone from the Maire downwards (or upwards) have often been of help to me (particularly when we first came and I had very little French).  The Dragon Lady at the Impôts, however, has been less than helpful and whatever I have told her has, apparently, gone completely over her head.

Some of us do things that you disagree with, not because we don't know better but because we do!

You don't know my circumstances so I'm afraid you'd have to give me the benefit of the doubt as to why I choose to go to my Tresor and not the Impôts.

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Even if you do go the the Hôtel des Impots, you wont necessarily get the address change either.

As regards the exchange rate Ron, I too went to the Hôtel saw two people, mentioned the rules, still got the 1.04 rate. Then I mentioned you and they laughed!!!

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Thanks again for the input, I'm sure you're correct Araucaria and I no more trust HMRC than the French but at lest I can argue with them on qual terms. 'Pay in Frence and cliam back from UK' is exactly what the woman at the Impots said, that was crystal clear, nothing about offsetting.

I'm still minded to forget the whole episode and file as per last time.

Nobody has mentioned the demand for a letter from the Mairie, because the C de S no longer exists she,said, but they were happy enough to accept my declaration last year without it. Another piece of  invented BS ?

Again circumnavigated by filing and saying nowt.

As a matter of interest, what are the tax allowances in France for a couple with no dependent children ?

I have not researched this because I had not though it would be relevent to me just yet.

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Income threshold to be exempt from paying income tax:

For those under the age of 65: €8,270

For those over the age of 65: €9,040

Age allowance for persons over 65 on the 31st December 2008:

Net assessable income less than €13,950, abatement: €2,266

Net assessable income between €13,950 and €22,500, abatement: €1,133

10% expense alowance:

Pensions-minimum allowance €367, maximum allowance €3,592

Salaries-minimum allowance €413, maximum allowance €13,893

Income tax bands, applicable after applying the quotient familiale

0 to €5,852 = 0%

€5,853 to €11,673 = 5.5%

€11,674 to €25,926 = 14%

€25,927 to €69,505 = 30%

€69,506 upwards = 40%

I spotted this on the internet - public domain!
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Just to throw into the pot regarding exchange rates.  Currently the Impots in the south of the Haute Vienne are using €1.07. This is the rate that they are applying when Brits are giving their income in £ sterling and asking for the Impots to convert (which they will do).  Over the border in the North of the  Dordogne the rate they are applying in the same circumstances is €1.20.  Go figure.

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[quote user="sweet 17"]

Forms printed but still our address shows up as the UK one.  This is despite about 4 visits last year to the Impots and 4 visits to the Tresor to try and get our address changed.

battle (o[/quote]

Ron, I did go to the bloody Impôts.  They do something with the computer and I think, great, they're actually doing something.

But, the very next bill and back it goes to South Wales.

It's not as though I haven't tried all ways, Ron.

Perhaps you should come with me on my next visit and argue my corner?  Clearly, I'm not as effective as you are![:D]

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[quote user="Weegie"]Just to throw into the pot regarding exchange rates.  Currently the Impots in the south of the Haute Vienne are using €1.07. This is the rate that they are applying when Brits are giving their income in £ sterling and asking for the Impots to convert (which they will do).  Over the border in the North of the  Dordogne the rate they are applying in the same circumstances is €1.20.  Go figure.
[/quote]

Folks living in the Dordogne are richer than folks living in Haute Vienne?

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Ernie:

Always find the original 'texte ' in French.

The 'translations' are often very misleading, especially if made by a French 'translator' who has no idea of the meaning in English of the terms..

Just think of 'over draft' and 'découvert'...apparently the same but with different conditions attached.

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[quote user="Ron Avery"][quote user="J.R gone native"]

[/quote]  Why would anyone go into the Tresor Publique on a tax query??  Do they go in the butchers for their bread?  The Tresor Publique collects money, does not changes addresses or give tax advice, that is the job of the Hotel Des Impots, well it is where I live.[geek]

[/quote]

I cant answer your question Ron as I didnt ask them, however we dont have a Hôtel des impots in my town, the nearest is 30km away but in a different departement, by the look of the people they would have needed public transport of which there is none.

One was paying bills there the other went in just for advice.

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Nobody needs to go there...there is an efficient email system (turn around usually within 48 hours) provided that you address the correct department. As Ron says this isn't the Trésor, which is just the money collecting part of the system.

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araucaria

I await your input. I want to declare all my earnings to the french tax people. Having 3 kids and a wife means I don't pay any tax at the moment. From the UK perspective, I pay tax on anything over 6.2K (ish). It's convincing the UK tax authorities that I want to declare in France that  is the problem. Tax domiciled by choice, resident by ..obvious reasons. If i have to declare in the UK, and pay tax (about 4k£) as i don't earn enough to pay tax in France, I won't see any of that of as a "credit impot" in France. I can't afford to lose that amount in tax. Does article 15 exempt me from UK tax?

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Ernie

For what its worth I think its rubbish, However your case is not the norm is it?  Do you have your main residence and seat of financial residence in France and is that the address used for all your accounts and employment? You also have a worker's E 106 which tells them that you do not work in France and they might think you do not live here either. Easiest is to get a letter from the Mairie and that settles that once and for all. What I would then do is follow the FAQs in the tax section and declare your income as if it was a military or service pension taxed in the UK.  That way you are ensuring it doesn't get taxed again and you pay the appropriate rate on any income to be taxed in France.

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