Jump to content

Tax Shocker!


graemeinparis
 Share

Recommended Posts

I lived in Paris between:

January 2006

and

September 2006

I worked in Paris and now live in London. I would like to return to Paris to live (maybe permanently) once I have finished my present contract in the UK.

My bank (Credit Du Nord) contacted me today to say that Revenue France is trying to get in contact me with regards to an outstaning bill of tax arrears.

My contact at CDN said that the sum is 15,000Euro. I can't quite believe it.

How on earth would I have not paid 15,000Euros?

During my time there I was informed that my money was deducted at source. Why? Because my company (an SARL, so ...... an actual French company) had not created a social insurance for me and that I was on an emergency tax band for 9months. (Like the UK when an individual doesn't provide a P45 from their last job).

Again, I do not have a national insurance number for France.

I earned approximately 45k euros in those 9 months, of which I seem to remember being paid a net salary (after deductions) of about 3000Euros a month.

Can anyone tell me what on earth am I supposed to  do next?

My French bank account is temporarily closed because I no longer live in Paris and I took my money out. It still exists, but there is "mothballed". But I have a good, cordial realtionship with my contact at CDN.

If I file a tax return to try and sort this mess out, what can I do if it is true - that I owe money?

Can I have the Rev France debt sent to the UK and pay for it over here along with this year's deductions (UK deductions). That is, have the tax bill sent to gov.org.uk?

Thanks for advice from anyone out there.

Cheers,

Graeme

Link to comment
Share on other sites

I am sure someone will come along with advice soon but in the meantime:  there is no PAYE (i.e.tax deducted on earnings) in France, only other things equivalent to NI and state pension contributions are deducted, and they are at quite a high rate.

We think you should get back to the SARL you worked for - why did they not get a social security number for you?

H.

Link to comment
Share on other sites

Thanks H.

And my reference to PAYE. I used "PAYE" just to mean "I was employed on a French contract and not brought over on an Expat contract". I used it to mean I was hired and taxed like a normal French person employed directly by a French company.

The SARL told me to get social security number (NI number equivalent) and I asked them for support. The HR manager was useless. That is, every time I spoke to her she said she was working on it and waiting for a response from the authorities. She left at the end of my contract and despite leaving the company, I stayed in contact with the new HR lady who was just as vague.

I didn't want to go home so soon and had hoped to spend a month hanging out in Paris and seeing the sights. However, it turned out to be a month sitting in the local employment office waiting for updates chasing my card (in the Marais). Finally, I got a green social insurance card/no. and then left.

I had a job offer from another SARL (interviewed for lots more) during that extra month but without a social insurance no........ no-one wanted to hire me - I couldn't pick up a legitimate new contract so I just left France when my money ran out. The card arrived just too late. So off I went. I was furious. At one point I threatened to go to the newspaper and suddenly my card was dug out of a pile of paper on a shelf behind the front counter and handed to me.

Between Jan'09 and Sept'09 I was based in Paris but spent all week on the road involved in a technical sales role fro my SARL which took me all around France and other parts of Europe (one trip to the States). I really needed HR to fix this issue for me whilst I was away but alas, it failed to happen. A colleague had said "you have to baby sit the Regie and be available to hastle them"........... for me, this was impossible. As soon as I moved to Paris I was flying all over the place.

Like I said, I want to move back but there is no way I can come back if I find out that I have a screwed up credit history and bailliffs looking for me, etc. A French friend in Paris just returned my call and said that if it was 15k back in 2006 - it will be a whole lot more now.

I feel sickened.

I want to pay this off. I want to get resolution because my wife loves France - as do I - and we can both work anywhere in the world now. Just as long as we have a wi-fi connection and we'd love to live and raise a family in France. It's our dream and were planning to move over in summer 2010. But not with this hanging over my head. This is a nightmare.

Anyone with ideas - please write back soon!

Cheers,

Graeme

 

 

Link to comment
Share on other sites

It may be that you have not been credited with the deductions that were made from your salary and in which case may not actually owe anything especially given what you have said about the Hr departrment.

I would contact les impôts, unless of course I had a soupçon that I may have actually got away without paying all the dues in which case I would probably rest inconnu [:D]

Link to comment
Share on other sites

You can use the tax calculator at www.impots.gouv.fr - it offers a calc for the year 2006.

A simple calc at €45,000 income shows that you would have had some €6,910 to pay (in 2007-8 - French tax is paid in arrears, like self-employed in UK).

Did you fill in a tax return in 2007 for your 2006 revenue?

If not, then you can't have paid any tax whatsoever (the deductions made by the company would only have been for your cotisations = NI, very roughly).
Link to comment
Share on other sites

The original post is either a wind-up, or made by someone who has no idea of how things work in France.

"During my time there I was informed that my money was deducted at

source
.

What do you mean 'my money'? Are you referring to tax?  This is not the system used here

 Why? Because my company (an SARL, so ...... an actual French

company) had not created a social insurance for me

They wouldn't 'create' anything

It's the job of the Sécurité Sociale to issue a Socil Security number. The firm can help you or you can apply for it yourself, but the firm creates nothing

 and that I was on an

emergency tax band for 9months.

No such thing in France

(Like the UK when an individual doesn't

provide a P45 from their last job).

No it isn't  because it is a totally different system where you pay the taxes a year later after submitting a tax return directly.

There is no equivalent of a P45.

The 'Avis d'imposition' is between you and the Tax people

The employer has nothing to do with your tax payments, except that for the last couple of years they have started declaring you annual income to the Tax authorities, but I don't think that that was the case in 2006

All in all it complete nonsense, and shows the perils of assuming that things in France work in the same way as in the UK

Link to comment
Share on other sites

[quote user="graemeinparis"]Can anyone tell me what on earth am I supposed to do next?[/quote](1) Hire a French accountant.

(2) Get your friend at CdN to send him whatever communication the bank received.

(3) Follow his advice.

Link to comment
Share on other sites

NormanH,

my original post is not a wind up. I am genuinely in a bind here. And I hold a strong position high up in public office back here in London. I want this taken care of. So please, no slagging me off. There is also a family tragedy involved during my time in France which made my wife and I very upset and blurred many of the ordinary issues we had to face during this extremely hectic time.

To clarify, I started work without a social secutiry number. I remember from the time I received my pay cheques that there was an enormous amount of money taken from my gross salary leaving me with about 40-45% money in my hand. I talked to other expats at my office and they said "oh, at the end of the year, you will still have to do a tax return and you will have more taxes to pay". So I thought fine. I went to double check with payroll department and they told me that without a Social Security number a "special arrangement" would have to be made. I "assumed" - me - not anyone else that perhaps what that arrangement was would be something similar to how the UK operates.

Don't ridicule me. I was brought over to France at the very last minute. I spent most of my time on the road. I was assured by my company that upon arrival they would advise me and they would provide a tax advisor to support my understanding of how things were done. I then travelled extensively, pushed continuously for support whilst I was on the road (making calls to my firm - who had offered to help). When you HR Manager says "don't worry, we'll investigate for you", one tends to believe that you are indeed being taken care of.

I left France believing that the appropriate special arrangements had been made for my circumstances and never thought naything about it again. My very last conversation the HR director was cordial and she told me that there was "nothing else to be settled" and off we went.

"All in all it is complete nonsense" - NormanH, I politely decline to receive any further responses from you.

Everyone else, thank you for your inputs and I welcome any further thinking you guys may have. I will most defintely contact a French accountant today.

Link to comment
Share on other sites

It sounds to me but I might be wrong that they were taking out your social charges even though you didn't have a number. You still need to complete a French tax return for that period.

I think you really do need some professional advice and contacting a French accountant may well be the way forward as I doubt that very few, if any, forum members have found themselves in the same position. You will need to find all your payslips for that period and ask for duplicates of those that are missing. They (the company you worked for) have to keep records for a certain time period which I can't remember exactly but my gut feeling is that you would be well within that time period so it won't be a problem other than getting them to actually do it.

Link to comment
Share on other sites

Having been in the situation of all my bank accounts in France being suddenly frozen because of an alleged debt which I allegedly did not pay (it was a case of mistaken identity, which took ages to clear), the first piece of advice I would give Graeme, is DO NOT OPEN A FRENCH BANK ACCOUNT before all this is cleared. Otherwise, the Trésor public will just seize it without further ado - they have a central database with every single person's bank account numbers and are very fast in tracking them down. ( in my case, although having the name and the address wrong, they still simultaneously froze my 3 bank accounts from different banks and different parts of the country).[:'(]... And they did this for two years running, in spite of me having been assured it had been sorted after the first year.....

They cannot do that to your British assets, not unless they go through the courts.

So my first port of call would be the Trésor Public who issued the letter, ring them up to find out exactly what this debt is concerned with. Sometimes you can find someone really co-operative at the other end of the phone, but not necessarily. You have to be firm and assertive. At least you can find out what this sum is supposed to cover, and then, get the professionals if necessary.

Link to comment
Share on other sites

  • 4 weeks later...
All I can say is that the same rules of common sense apply in France as they do in the UK. If someone told me that 'everything is being taken care of', or 'deductions are being made', then I would start asking questions there and then about who, what, why, when and how.

I am currently permanently in the UK, and may well get a freelance job soon that allows me to work from home using online facilities. If this works out ok, the 'employer' may be agreeable to me living in France 180 days a year (I have a newly renovated house there).

However, I would not even consider it until I had researched:

UK tax implications

French tax implications

UK property rental implications

Healthcare implications

..and a whole host of other implications.

If I was going to be living in France more than 180 days then I would be asking a lot more questions, and would probably hand everything over to a French Accountant to ensure that I wasn't going to get stitched up.

It pays to do your homework!

Rob G

Link to comment
Share on other sites

A good accountant here is Angela Francoise at Bruno Hebert in Caen.  They are part of a big national company Group Fidorg.  You can e-mail her at [email protected] 

Others may know other people but she's pretty straight in my opinion and you can deal with the company by phone/fax and e-mail which may be helpful.

My take is as per other posters - your company may well have deducted your cotisations (charges for pension, healthcare, social security etc etc) but not your tax so you are pretty certain to owe something.

Norman is sniffy with everyone who doesn't know the French system completely inside and out.  Just ignore him when he's in that mode - that's what most of us do.

Link to comment
Share on other sites

Not wanting to hijack the thread  but is paying your taxes in one hit at the end of the year the norm for say shop workers or labourers in France?

I would have thought if this was the case then employers would offer to 'save' the money for employees and administer the fund out the interest?

Link to comment
Share on other sites

[quote user="BIG MAC"]Not wanting to hijack the thread  but is paying your taxes in one hit at the end of the year the norm for say shop workers or labourers in France?

I would have thought if this was the case then employers would offer to 'save' the money for employees and administer the fund out the interest?[/quote]

A French employer has nothing to do with the employee's income tax, as there is no PAYE equivalent in France.

The employee calculates and settles his income tax. It can be paid in one hit, in two hits, in three hits or monthly.

Link to comment
Share on other sites

Instead of it being deducted by the employer, they declare their income and get a tax bill like everybody else.

But that bill can be paid in 3 instalments, even in 12 I believe.

the difference is that that is between the employee and the tax office.

Tax is paid the following year and to the tax office.

It is not handled at all by employers.

Link to comment
Share on other sites

The numbers quoted by the original poster tie in with the expected monthly social charges of about 1000 Euros per month being deducted by the employer

I suspect the 15,000 demand is in line with the calculation of tax liability with no allowances. I assume that this is done by the fisc so as to attract the attention of  the recalcitrant tax payer. The actual debt is probably in the region of 6 or 7000 Euros.

 

Link to comment
Share on other sites

[quote user="cooperlola"]

Norman is sniffy with everyone who doesn't know the French system completely inside and out.  Just ignore him when he's in that mode - that's what most of us do.

[/quote]

"Where people wish to

attach, they should always be ignorant. To come with a well-informed mind is to

come with an inability of administering to the vanity of others, which a

sensible person would always wish to avoid."

Am I wrong in my account of the way the system works?

If not it isn't very sensible to "Just ignore" me, especially for  someone who says he loves France (and so needs the right information) so much that he wants to live here, despite not knowing enough about it to pay tax here.

On the other hand he did manage to get a 'carte vitale'.

Strange that!  I can believe the line about high public office...

Link to comment
Share on other sites

Effectively the French tax system is, for everyone, employees and 'self-employed' alike, like that in the UK for those who are self-employed.

Unsurprisingly, the tax authorities here are jealous of the PAYE system (grab the tax up front, a year or more in advance) and there are rumblings that the system may soon be 'harmonized' ...
Link to comment
Share on other sites

[quote user="NormanH"][quote user="cooperlola"]

Norman is sniffy with everyone who doesn't know the French system completely inside and out.  Just ignore him when he's in that mode - that's what most of us do.

[/quote]
"Where people wish to attach, they should always be ignorant. To come with a well-informed mind is to come with an inability of administering to the vanity of others, which a sensible person would always wish to avoid."

Am I wrong in my account of the way the system works?
If not it isn't very sensible to "Just ignore" me, especially for  someone who says he loves France (and so needs the right information) so much that he wants to live here, despite not knowing enough about it to pay tax here.
On the other hand he did manage to get a 'carte vitale'.
Strange that!  I can believe the line about high public office...
[/quote]No, I thought your answer was pretty practical and sensible in fact.  But it's no surprise to me that, on a forum of this nature, people ask questions which - in the best of possible worlds - they would know the answer to before they moved.  But reality is not like that and many just turn up and hope it sorts itself out.  We who do a bit of homework may not like it, but not everybody is as practical and sensible as you and I ,Norman!  This just seems to come as a bit of a shock to you at times and, sorry, you can get a bit sniffy about it.  This aspect of your posts I tend to just gloss over and ignore, and look only at the practical and well informed advice you often give amongst the brickbats.  Sorry if I caused offense.
Link to comment
Share on other sites

Although NormanH may have put things a little bluntly, what he says is perfectly correct.

You say "I hold a strong position high up in public office back here in London" - if the French position was connected with that, then arrangements would usually be made for you to be in France on temporary assignment, lasting normally up to two years, though this can be extended under EU rules, on a form like E101 or E106 (the 'worker's' version) so that you could be covered under the French health system while still paying UK NI. You would also, under the double taxation agreement, continue to pay UK income tax during this period.

However, you refer to a 'French contract' which throws a different light on things. Normally if you are employed in France and have no social security number, the employer notifies the local CPAM offices which issues you with a SS number and all then works normally, with about 20% of salary being deducted at source to cover social security and health. This should be itemised (under about 16 different headings if I remember correctly) on a pay slip, which the employer is bound by law to issue. If you are French fiscally resident, and thus liable for French tax, you declare and pay tax in arrears, unlike the UK PAYE system. It should not matter whether its is a permanent (CDD) or temporary (CDI) contract.

If it is a self-employed contract, not related to your work in UK, you are expected to register, either as a self-employed sole trader or as a business in France, and as a result of this you will be invoiced for your social security charges (by whom depends on the nature of your work). Alternatively, you can opt to be employed by a 'portage salarial' company which will invoice your employer and pay you, less social security charges and its own fees.

So what you have been told does not entirely add up. Unless you have been employed on a so-called 'French contract' by a non-French company that does not really understand how to do things properly in France.

My explanations have been somewhat simplified - if you want the EU view, in English, about employment in France, this site may be useful: http://ec.europa.eu/youreurope/business/managing-business/managing-staff/france/index_en.htm

Edit - a rough calculation, for a single person, of French income tax payable on 45,000€ assuming no other income, would be about 6500€, confirming BJSLIV's estimate.

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...