Anyone phoned tax office for exchange rate yet?

[Ron Avery]

So parsnips the ex UK tax inspector's justification for deliberately understating your income is "This to further inflate the obscenely bloated and inefficient french state".  Glad to see you have your priorities right then[Www]  Were you happy for people to do the same and not pay your wages in the UK?

You also state that "why would anybody chose to further deplete their already diminished income" ............ Well, how do they know its depleted if they don't know what the rate is until May of the following year????[8-)]

[David]

Do you actually believe this stuff Ron, or are you just stirring it?

David

[chessfou]

I have been dithering over this one but I don't quite understand why; it would have taken my mum less than a second to come to the right answer.

What is the law? It is crystal clear. You, like I, will have your red form 2047 and (probably) the notes (2047 NOT-K) that go with it. On page two of the notes, near the top, is a section "II" headed " Revenus encaissées en monnaie étrangère" which says exactly what to do.

Incidentally; you'd better not use a site like xe.com because it should be the banque de france rate (they have a downloadable day-rate file which makes the process easy).

I will pay about 85% more in tax than if I used the 0.9525/1.05 rate but it is the correct amount (and almost exactly the same as we paid last year).

So, yes the "House fees office" (my local tax office sent me an email of the 0.9525 variety) is prepared to sanction my "duck island" and my mock tudor beams for the front of the house ... but just because someone at some level of authority has told me that I can do something, that doesn't make it right, or even legal.

As for stuff about paying for bloated government ... hah! Just how long will it take (forever is a long time) to sink in (a) that the level of public sector employment in France is LESS than that in the UK and (b) taxes, at least on individuals, in France are generally quite a lot lower than in the UK.

[Just as an example of that last, we pay almost 2/3 less in tax here than in the UK (that's with 2x the average RFR of our commune, 2.5x the median). Of course, cotisations, mutuelle, taxe hab, TP etc. all add up as well but the sum total of all those is still marginally less than we paid in Council Tax in the UK]

For those who are taking a "payment holiday" that's your choice but I suggest that you don't start dreaming about a tax investigation, otherwise you'll have nightmares.

Everything was so simple for my mum - just do what's right.

PS. The "average" rate of 1.20 or 1.21 seems reasonable enough but just how many payments do you receive a year? Probably we have comparatively few at the moment (only about 30) but even next year (closer to 60), it will be easily manageable to calculate the day rates.

[Ron Avery]

[quote user="David"]

Do you actually believe this stuff Ron, or are you just stirring it?

David

[/quote]

No its not a wind up.   What is being suggested is that if you you are ex civil servants/police/teachers/services and do not get your pension/allowance paid in France in euros, you can declare it at a totally different rate to that used by people who receive their pension in euros on the same dates.

This "rule bending" is then deemed "OK" as long as you have bit of paper/E mail but I doubt that many who choose to go this route this year will be so insistent on using the year end rate if the rate at the end of next year is stated as 1.35€ and for much of the year it was below that rate.[blink] 

All those contributing here know what the "right" rate is, so why not just use it[8-|].

[allanb]

Chessfou: I have a lot of sympathy with what you say, but I'd like to make a couple of points:[quote]...you'd better not use a site like xe.com because it should be the banque de france rate...[/quote]The law doesn't mention the Banque de France, and I don't think there's any reason to make people nervous if they've used a rate from some other source. There are dozens of possible rates for any particular day, and as long as you don't obviously pick and choose to save a few euros, I can't see a problem.

While we're on that subject, the law doesn't say anything about averages, either; and there are several different ways to compute an average. But if we go down that road, this thread will run and run.

[quote]For those who are taking a "payment holiday" that's your choice but I suggest that you don't start dreaming about a tax investigation, otherwise you'll have nightmares.[/quote] Whatever we may think is "right", as I have said before: if you have a written instruction from your tax inspector* which clearly gives you a single rate for the conversion of all income in the year, I do not see how you can can get into trouble by using that rate.

Although the 1.05 rate is absurd, I can't imagine an investigator saying to the taxpayer "I know that your inspector gave you that rate, but you should have realized that it was a mistake."  He might say that to a company with professional accounting staff, but surely not to a modest expatriate.

*Or - better still - from a higher authority, as SD has pointed out.

[parsnips]

[quote user="Ron Avery"][quote user="David"]

Do you actually believe this stuff Ron, or are you just stirring it?

David

[/quote]

No its not a wind up.   What is being suggested is that if you you are ex civil servants/police/teachers/services and do not get your pension/allowance paid in France in euros, you can declare it at a totally different rate to that used by people who receive their pension in euros on the same dates.

This "rule bending" is then deemed "OK" as long as you have bit of paper/E mail but I doubt that many who choose to go this route this year will be so insistent on using the year end rate if the rate at the end of next year is stated as 1.35€ and for much of the year it was below that rate.[blink] 

All those contributing here know what the "right" rate is, so why not just use it[8-|].

[/quote]

Hi again Ron,

      If you read my post again you will see that I say that where you know the rate on the day you should use it.My pension is paid in € to the bank in France so obviously I use the total of the sums received in the account for the declaration. I use the "acceptable" figure for a bit of bank interest.

     You make a good point about a high year end exchange rate, and some years ago this was the case. I have no doubt many people put a lot more effort into finding the actual rate then--but I'm afraid that's just human nature , and even if one stands morally above the rest of humanity, it is fruitless to constantly whip oneself up into a frenzy of self-righteousness--it's probably bad for the heart. 

    

[chessfou]

[quote]The law doesn't mention the Banque de France[/quote]

What it actually says is "le cours du change à Paris au jour de l'encaissement". [my emphasis]

From that I think it rather clear that we should be using the figures from the Banque de France (as indicated to me in the email I received from the DGI and quoted on p5 of this thread). Are xe.com based in Paris? OK, it's arguably a detail but why get something 95% right when 100% is easily attainable?

[It is actually quicker to use the downloaded table from the BdF rather than inputting the details for each day on the xe.com site and ending up with a rate for, e.g. 26 May 2008 "at Noon Eastern Time"]

[Kay]

Sorry but the rate of 1.04 should only be used by individual for 'Wealth Tax'.   For other income use the exchange rate on the day of the transaction (as previously stated by Cooperola).  See the link below for clarification.

 

http://www.kentingtons.com/blog/index.php/tax-declarations/french-income-tax-returns-2009/

Kay

'Look forward and not back;  Look out and not in'  

[Sunday Driver]

Haven't you read the previous 83 posts.....

 

 

[cooperlola]

[quote user="Sunday Driver"]

Haven't you read the previous 83 posts.....

 

 

[/quote]Ah, and further enlightenment is available HERE and HERE.....  (and that's only since the turn of this year).[:-))]

[chessfou]

Gives a real insight into what was probably going on in the House fees office ...

Well, if I can't claim for a brand new swimming pool, nor for my moat, how about a "duck island"?

If at first you don't succeed, try, try again. Is that a purely Anglo saying?

[parsnips]

Hi,

  I would just like to take up a couple of the points made by previous posters.

  Government pensioners have already been taxed in the UK (more heavily than they would be in France), their UK pensions are only "taken into account" in calculating their french tax rate on other income.

 It is true that french income tax is generally less onerous than british income tax. This is a deliberate policy of successive french governments of both left and "right". The killer (from which UK pensioners are happily immune) is the amount of social charges (tax by another name):

  I quote below figures issued by AFERP(whoever they are) for January 2009 showing the total paid out by the employer in order to produce a net salary (which may still subsequently be subject to income tax) (No doubt my friend Ron will challenge their authenticity: let him produce a more authoritative set)                                                                                                                                                                                                                              

Gross mth 2177€..  social charges (employer + employee) .. 1051€..  net mth 1087€ .. gross annual 26063€.. net 13043€..  income tax (couple)Nil/ /:.............Gross mth 4204€ ..social charges ..2018€... net mth 2106€... gross annual 50266€ ...net 25273€ ...income tax (couple)607€/./:..........Gross mth 8167€... social charges... 3691€.. net mth 4318€ ...gross annual 98016€ ..net51815€... income tax 3900€.                                                 . 

Although social charges are ,on the face of it shared between employer and employee ( with the employer paying the larger part), a moment's thought will suggest that in fact all the costs are born by the employee as the employer fixes the salary in the light of the overall cost of the employee, and the more paid in social charges,the less available to increase the net salary.

It could be argued that the social charges will all be available in services ,where need arises ,to the employee, but this ignores the large sums spent supporting the families of the un-or under-employed, many of whom have realised that they are better off out of full-time employment(even were it available).

  As regards the size of the french state, the figure I have seen most quoted(and I cannot find a government site with the figures) is 5.5 million fonctionnaires and 15.5 million other workers ,ie; 1 fonctionnaire to every 3 other employees.

  According to National Statistics On-line, in 2005 in the UK , 20.4% of employees, or 1 in 5 employees was in the public sector (ie 1 public for each 4 private employees).

[David]

Parsnips,

Why do you not offer to provide a tax service to members of this forum?

I for one would welcome it.

David

[parsnips]

[quote user="David"]

Parsnips,

Why do you not offer to provide a tax service to members of this forum?

I for one would welcome it.

David

[/quote]

Hi,

      Thank you for your confidence. As I am retired and do not want to complicate my affairs I am not interested in any sort of business . Where I am asked questions on forums or by PMs I do try to give a factual answer ,if I can find one. The information that I have is freely available in the media, and most usefully (in my opinion) in the publication "Le Particulier" which is a monthly (with occasional "hors séries") dealing with all aspects of "official France".If you have a specific question PM me and , if I can, I'll answer it.

[chessfou]

Parsnips,

I occasionally put up numbers for PS workers in the two countries

(most recently on another thread here three days ago):

UK: public sector employment rose every year to 5,846,000 in June 2005 

http://www.statistics.gov.uk/cci/nugget.asp?id=1292

has Gordon since reversed the trend?

FR: l'État emploie 3,08 millions d'agents au 31 décembre 2006. 

http://www.insee.fr/fr/themes/document.asp?ref_id=agents06 

but you do have to add about 1M health workers. 

http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=NATTEF06103 

[parsnips]

[quote user="chessfou"]Parsnips,

I occasionally put up numbers for PS workers in the two countries

(most recently on another thread here three days ago):

UK: public sector employment rose every year to 5,846,000 in June 2005 

http://www.statistics.gov.uk/cci/nugget.asp?id=1292

has Gordon since reversed the trend?

FR: l'État emploie 3,08 millions d'agents au 31 décembre 2006. 

http://www.insee.fr/fr/themes/document.asp?ref_id=agents06 

but you do have to add about 1M health workers. 

http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=NATTEF06103 

[/quote]

Hi,

      Having looked at your links ,I don't think they include public education, or local government employees.Can you clarify this please?

[chessfou]

Parsnips,

I'll do a lttle bit of the work for you but then it's up to you (having given you the links!)

Public education:

"Au 31 décembre 2006, les ministères civils comptaient en métropole,

dans les DOM-TOM et à l'étranger 1,84 million d'agents titulaires et non titulaires."

...

"Le ministère de l'Éducation nationale, de la Jeunesse et des sports et de la Recherche,

qui représente les deux tiers du total des effectifs des ministères civils avec 1,17 million d'agents"

[my emphasis in each case]

It's actually 63.58% if you want to quibble about the "two thirds".

Both quotes from the page of my first link.

Any more, down to you to do some proper research.

Why don't you put together a table, for the two countries, with numbers per category?

That would actually be useful.

[allanb]

[quote user="chessfou"]What it actually says is "le cours du change à Paris au jour de l'encaissement".[my emphasis][/quote]I know it does, and I'm not saying there's anything wrong with using the BdF numbers, only that the definition in the law is imprecise. 

In fact the BdF on its own website says, modestly, that its rates should not be used for any official purpose.  But I think we can safely ignore that, just as many tax offices do. 

[cooperlola]

I know I am soft in the head (I can hear you all arguing with me about this), but I used a different site for my calculations then found the BdF one and did it again.  There was less than 2 euros difference over the whole year for my o/h's pension.  I doubt anybody would get very wound up about that.