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E109 and tax and working


joanofarc

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I would be glad of some help from forum users please.  I am living in France using an E109 for healthcare as my husband works full time in the UK.

I would like to do some work, preferably self employed (e.g.autoentrepreneur) but am concerned about healthcare and particularly tax.  I was told by our local tax office (in France) some years ago that as I had no income in France and my husband worked and paid tax in the UK I/we did not need to complete a tax form.  We have never done so therefore.

If I work can anyone share what might happen about our tax, from your experience.  Would I be taxed as a single person for instance?

Also CPAM have told me that I can work 60 hours a month, or 120 in three months and my E109 would not be affected. But I do not understand what would happen if I was self-employed.

Any help, tips gratefully received.

JoA

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Pucelle,

I'm pretty sure that you should have been doing an Impots return even though none of your family income is taxable in France. Someone else might be better placed to confirm or otherwise.

If you start working here, either as an employee or as an AE you will definitely need to fill in a tax return. You should be taxed as a couple and, again, you would normally include your husband's income in the 'taxed elsewhere' category.

I don't know about an E109, but the E106 (now summat else) becomes invalid if you work in France. However you will have cover as part of the French system if you register as an AE. The figures that you quote from CPAM relate to how much you need to do to get cover as an employee.

I suggest that you phone or email the UK office that handles your E109 and get their version of the rules as far as your UK cover would be affected.

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The French rules are, in some respects, a bit of a mess so it is not easy to give a simple answer to your questions.

First of all, strictly speaking, your tax office was wrong. Presumably you meet at least one of the criteria for being considered French tax resident (e.g. your main residence is in France and you spend more time in France than any other country). So even if you have no income and/or no tax is payable you need to make a French tax declaration. Far from putting you in the spotlight and costing you money, this means you are able to prove you are French fiscally resident which can have a lot of advantages. I guess the tax office, not uncommonly for officials in France and elsewhere, just didn't want to be bothered and took the easy route out.

Your CPAM office is right in so far as you need to work in salaried employment for over 60 hours a month or equivalent before you become liable to pay social security charges on your employment income in France. Or to put it another way, you do not qualify for French healthcare benefits if you work fewer hours than that. And as an E form is superseded once you start paying into another social security system I can understand where they are coming from.

However, if you are self-employed that's not the case. As soon as you register (as you have to in France) as self-employed you join the French system and become liable to pay social security charges, regardless of how long you work or how little you make. The exception is the autoentrepreneur/micro-social regime (comparatively new) where you effectively pay as you earn. As the rules stand, as long as you make one quarterly declaration in three years you stay registered under the autoentrepreneur regime, and hence stay in the French system. Some 'economically inactve' people seem to be using this as an inexpensive way into the French system, much cheaper than health assurance, so a change in the rules is quite on the cards and, some would say, overdue.

Under French tax law you cannot opt to be be taxed as a single person. Even if one spouse works overseas and pays tax and social security in another country, you still have to declare your worldwide income in France as a couple. Where any particular income is taxable is determined by the double taxation agreement.

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Thankyou to all for your replies to my questions,I realise how much time this takes.I think from your replies that I will need to speak to a French accountant.As I am not living in Paris or any other city,just in a rural area would anyone know the cost of a half hour consultation?

JoA

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It depends on the accountant. Many will offer a free initial consultation in the hope of getting regular work from you. Depending on which official body handles your intended type of business, you may be able to get the advice through the local CFE (chambre de commerce or chambre de metiers) though I have to say I got some wrong advice from such a bureau some years back. The tax office should also be able to help, and many people have found them helpful, but your experience shows that they are not always knowledgeable or reliable.

The local CPAM or URSSAF is another possible organisation to ask, particularly about health and social security issues. URSSAF should know, but I have read of a lot of people finding them useless, while although you are with CPAM at present by virtue of your E109, if you start a business you would move to another caisse (probably RSI which really is a bad organisation to deal with) so CPAM would probably be unable to answer because you would be outside their remit.

Sorry if this is beginning to sound negative. The multiplicity of different bodies you have to deal with is probably the main difficulty. It's not fair to say that all the French departments are peopled by jobsworths and those who don't know the answer - many fonctionnaires are excellent and helpful - but on the other hand French bureaucracy has a certain, well-deserved, notoriety. It's the luck of the draw really.

Perhaps your best bet would be to start, for the basics, with a service like www.startbusinessinfrance.com. There is a charge (50€ membership) but that looks like a good investment for you. I have no direct experience of the service, so am not specifically recommending that site, but I have heard that the video guides, in particular, are very good.

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To be honest if you want something to do to keep you busy rather than needing to earn money I'd pause to ask yourself if it will be worth all the bureaucratic bruhaha and flack it will inevitably generate.

If you want to do something why not get involved with voluntary work or a charity as such things will not compromise your current status.

In short my advice is if you don't have to work don't [;-)]

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