Tax for Americans wanting a year in France

[Russethouse]

Some American friends would like to spend a year in France but are very concerned that they would be deemed resident and have to pay French tax on their income.

Does anyone have any information on this please ?

[mint]

RH, wouldn't that depend on whether they are going to be buying property, working, etc?

Isn't it to do with being fiscally resident?

If they're only spending a year here, holidaying, are financially inactive, do not buy property and do not in anyway show their "centre of activity" to be anywhere else than the US, surely they would not be "deemed resident"?

Anyway, that's my understanding for what it's worth.  Parsnips or SD will be able to give you the relevant official info in both French and English no doubt![:)]

[Lori]

RH - Will they be arriving on the normal long-stay VISA?  Being non-EU, they must have a VISA to live here for a year.  As questioned before, the work issue is important. 

Assuming they will arrive on a long stay VISA and NOT work here, they can probably get by without filing in France.  Yet, I'm not sure how legal that is.  I have been advised that even if you live here and earn not a centime, you have to file.  Being FAR from an expert, I have no idea how true that is.  We HAD to file, even though my husband worked for an American company and was paid in the USA.  If they maintain their main residence in the USA, I think that is the key here for tax liability.  At least that is what our tax accountant tells us.  We didn't/don't have a home in the USA, so the issue was rather moot for us.  We is here, we payyyyy.......

Obviously, if they arrive on long stay VISA's, they will not be able to join any French social systems, including the healthcare system.  I'm sure they already know this.

Probably no help at all, but I do think they should be careful taking tax advice from forums.  Not knocking the forum what-so-ever as it is a very good place to start, but I cannot tell you all the inaccurate advice we received when we first arrived here.  We were told we HAD to join the healthcare system (we didn't have the right) among so many other things. 

I'd just say be careful and check all advice with a licensed French professional (and be careful with that too).

Hope I've not royally peeved anybody.

[Russethouse]

They are retired so will not be working and they would be renting, not buying. They would retain their home in the US and return there at the end of their 'year out'

They know about the need for a Visa

Thanks for your thoughts so far

 

[ausibattler]

In simplistic terms, I would think the 183 day rule still applies regardless of EU or non EU Tax status.

A short stay Visa is normally for upto 3 months

Our experiance is my wife, Australian (non EU Passportholder) obtained a long stay Visa or 'Titre De Sejour' because I am an EU resident (BritishPassport Holder).

 We both live in Australia with a Resident Secondare in France and stay upto 6 months or more each trip.

Google 'Titre De Sejour' for further info on various sites.

Might help?

[Will]

The important thing is whatever double taxation agreement exists between France and USA, which will determine where any particular money is taxable. And that as non-EU citizens they will require titre de sejour if they are staying in France longer than three months, which will put them on the radar as far as the authorities are concerned. Though in practice they would probably get away with it, because by the time French tax becomes due they will have left the country.

[Sprogster]

The USA tax system is almost unique in that you are liable to US Federal taxes by way of holding US Citizenship, or a Green Card, regardless of whether or not you spend anytime in the USA.

Therefore, US nationals, cannot escape the US tax net by moving to another country, unless they revoke their US Citizenship which is very difficult to do and triggers off in itself some fairly dire tax liabilities.

My guess is that by spending twelve continuous months in France they will technically become French tax resident, but any French tax liability would be mitigated, as their US tax liability would probably be allowed as a tax credit under the French/USA DTA. That said the French tax liability could be greater, as French tax rates are generally much higher than the USA.

Personally, I would not be too concerned, as I cannot see the French Fisc pursuing two American retirees whom come to France for an extended holiday..

 

[Anton Redman]

Run the year from 5th July to 28th June under 183 days in France in either tax year. Fly into the UK or Germany because it is cheaper.

[Lori]

Sprogster is right, we file (and pay) to both countries....   Yes, I know there is a treaty.  You still end up paying, just not quite as much... 

[allanb]

[quote user="Sprogster"]US nationals cannot escape the US tax net by moving to another country...[/quote]

True, but if they are resident in France under French rules, they can still benefit from the US/France treaty, which may make some of their US income taxable in France and not in the US.

They need expert advice, and I think the number one question for their chosen expert is: given all the circumstances, will they be treated as resident in France?  The rules for this are more complex than the simple 183-day test which is mentioned so often.

[tenniswitch]

As a US citizen, it is my understanding that the French 183-day rule would apply.  Regardless of US/France tax treaties, given the disparities in the tax rates, it would be very difficult to imagine that a year in France will be quite expensive for them, unless their total income/wealth is very modest.

Which is why we are careful to count our aggregate of days in France each year. [:)]

[Anton Redman]

First point unless they renounce their US citizenship they will still be subject to US taxes. Second point if they stay under half the calender year in France they avoid French taxes answer come over in July and leave in June the following year