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taxation and social charges


ando

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[:D]Hi, can anyone out there help me with a little tax question?

I think I understand the way in which income tax is calculated,

However with regard to social charges and health charges, can anyone say

whether these are payable on every euro of income (pension) or whether there

are thresholds/allowances as per income tax below which these charges are not raised.

Thank you, Ando

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Yes, there is a threshold for health charges, above which you pay 8% of your RFR (in effect your worldwide income, whether taxable in the UK, France or Timbuktoo -sp?). I can't remember what this amount is but I'll look it up if somebody else doesn't get there first.  However, if you are covered by an E-form, there are no charges to pay; lilkewise if you are a newcomer without an e-form who has to get private insurance when, quite obviously, you don't pay either.

Social charges are much more complicated and the amounts vary according to where the income comes from and, again, whether your covered by an e-form, the french state system, or private insurance.  The jury still appears to be out as to exactly how much those in the French health system, who have company pensions from abroad, should actually be paying.  Every time the subject comes up, the anwer seems to be different.[:-))]  There's a recent thread about it which I'll find also if I can.

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It wasn't much of an answer, sorry!  However, much depends upon the source of your income and your healthcare. 

Here is the thread discussing the social charges: http://www.completefrance.com/cs/forums/1553888/ShowPost.aspx

The threshold for calculating your healthcare contributions is 8644€, but I can't for the life of me remember if this is for a couple or a single person - I think the former though.  I was rather hoping somebody a bit more knowlegeable would have been on by now.. All my own papers on this are at home and I'm not or normally I'd have nipped to the filing cabinet and looked it up.

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[quote user="ando"]

Ok Cooperola thanks for that, still not quite clear about it

but no doubt i will find out when i make the move hopefully in 18 months time.

just trying to be as well prepared as possible. Thanks again. Ando

[/quote]

Hi,

    If you are not moving to France for 18 months then there are only two possibilities for your health care:

    1. If you,or your wife, are receiving a state retirement pension (or certain other benefits) you will be provided with a form E121 (from dept of work and pensions), which entitles you to free membership of the French health system.

    2. If you and your wife , have not yet reached state retirement age you will be required to provide your own private insurance to adequately cover yourself and all members of your household until one of you qualifies for E121.

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Or the third option - work for your healthcare.

OK, the chance of getting a job is somewhat slimmer than winning the Euro Millions Lotto, but the 'Start a sham business under the autoentrepreneur regime' loophole looks as if it has not yet been closed [:D].

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Hi, I am interested in this whole issue, as I may well be retiring to France at the tender age of 53 in a couple of years time (on an actuarially reduced NHS pension).  I understand that as I won't have an E121, my E106 will give me a max of 2 years state health care in France, depending how clever I am with timing the move.  My understanding is that I would then need to take out full private health cover for myself, wife and (then) 12 year old son, until I have either been resident in France for 5 years, or get a job (which I am not averse to doing - if possible!).  Is the 5 years residence thing correct, or would I need to wait until I reached 65 and got an E121 unless I worked?

Am I also right in thinking that I cannot simply make voluntary contributions to the french tax and social system to obtain healthcare benefits, and would have to either work or gain this 'autoentrepreneur' status somehow?  I have a leaseback property in France and am registered with the french tax and TVA system regarding this (as a BIC non-professional & non-resident) but as I have a french mortgage on the property, it will never make a true taxable profit.  I can't see how I will be able to make contributions through this route unless I didnt declare all the expenses and so make an artificial profit.  Would that make any difference once I was resident?  If I were working as an employee, is there a minimum you must earn to qualify for healthcare benefits?

What sort of businesses can attract this 'autoentrepreneur' status and is there a good link in english that explains this status (and what it means for tax and social contributions purposes) in detail?  Finally, I don't fully understand all the abbreviations flying around regarding the health system in France (CPAM, CMU, etc).  Is there either a good link which fully explains everything, or can anyone out there put their own personal gloss on it.  A lot of questions there and sorry for my ignorance.  I would as always be very grateful for any info and advice on offer.  

 

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Your first paragraph indicates that you have got this pretty much sussed; your understanding is bang on.  No you can no longer (as one who will have moved after November '07) contribute to the French health system in order to join it before your five years are up.  Private healthcare or employment are your only options.  If your wife reaches state retirement age before you though, you would get an E121 via her to cover you both when she did.

AFAIK, if you are gainfully employed for more than a certain number of hours a week (I think it's 20), then you would get healthcare under the regime of your employer (which one depends on the kind of work you're doing).  Others on here know a lot more about being employed etc. - can't say it's my thing really.  But Will and others will be able to advise better than I.

CMU is the state healthcare regime for those who do not get it via their employent.  It used to be the regime under which Europeans got healthcare but no longer applies (see above).  The CPAM (Caisse Primaire D'Assurance Maladie) is the office which deals with all the admin' and paperwork. 

For more info' see our website (below). 

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Just to expand on Cooperlola's reply, you will probably not be able to use property lettings to generate your healthcare unless it is a big enough business to provide a living, or, at the very least, makes up the major portion of your income.

The autoentrepreneur regime was launched this year, so is still in its very early days. The official government site is here - www.lautoentrepreneur.fr although there are several other sites. Everything is in French, as you might expect. My interpretation of the scheme is (though others disagree) that it was launched to make it much easier and more economical for people already in the French system, through, for example, salaried employment in France, French retirement benefits or French unemployment benefits, etc, to start a spare-time business which might (or might not) grow into something much larger. In order to give it sufficient flexibility, it seems you are committed only to make one declaration of turnover in a 12-month period, from which you will be charged a percentage (exactly what percentage varies according to the nature of your business) as a social security payment.

Now to anybody clever, that looks like a really economical alternative to taking out full private health insurance, which is the other option if you have no cover through 5-year residence, E121, E106 or similar. As I am sure that the AE regime was not intended to be used as a cheap means of entry into the French health system, this loophole is likely to be closed once people start using it that way and the authorities catch on. Exactly how they will be able to do this without shutting the door to some genuine start-up businesses is not at all clear, and it's the French authorities' problem, not ours, so there is little point in speculating.

Your last question - dependent family members have the opportunity to 'piggy back' on to your healthcare entitlement. So if you have cover in France your dependents can be included. If you have to take out private cover, you need to ensure they are included. One thing arising from that; any healthcare in France will only give you the same level of cover as any other French resident, i.e. some 70% of the standard costs, so you need to have top-up insurance or be prepared to pay the rest out of your own pocket.

Despite all the foregoing good advice, I honestly think the best thing you can do is consult a financial planning specialist.

 

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If you want to know more about the  auto-entrepreneur scheme this is a good translatio of the government guide, although I know it's currently being updated.

http://www.pbss-uk.com/auto_entrepreneur_EN.pdf

Although Will (among others) is quite cynical about the autoentrepreneur scheme it is a perfectly valid way of getting into the French health system, assuming that you intend to do enough work to justify getting the health cover.

In my case almost all my work is done at home and I can do it anywhere with a decent broadband connection, so moving my operation from the UK to France is easy. Assuming that the recession doesn't totally wreck my market then I'll be making at least enough to live on.

I would be surprised if the French authorities don't eventually bring in some lower limit on the cotisations needed to qualify for cover, for people who have no other income, but that's for the future.

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[quote user="Albert the InfoGipsy"]

Although Will (among others) is quite cynical about the autoentrepreneur scheme...

[/quote]

Albert, if you read some of the other posts you will see that Judie (Mrs Will) received her Siret and confirmation of registration as an autoentrepreneur on 6 Jan, which by my reckoning makes her one of the first to adopt the new regime, and certainly one of the first English. That's hardly evidence of cynicism about the scheme - quite the opposite.

My point is that as the rules stand at present it is all too easy for people to use the scheme solely as a cheap way into the French health system, rather than as a bona-fide business, and I think this loophole will have to be closed. Being realistic, there is a risk that solving this problem could make it more difficult for people like Albert who have no other entry into the French system other than work, and intend to use AE as a genuine business regime, so people need to remain aware of this possibility. I also believe, based on my own experience, that AE, or any other form of micro regime, isn't necessarily the best solution for everybody - though it will suit many. Businesses do need to consider the less restrictive regime réel as well.

That doesn't affect us - Judie was (and remains) in salaried employment in France.

 

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Could the AE scheme also be intended, (not as the primary motive) to encourage those who want to move to France to engage in economic activity as an alternative to living off a lump sum generated in the UK?  The lure of  healthcare benefits may be seen by the French Gov as a "loss leader." Just a thought
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Will, sorry, maybe I should have said 'cynical about people using AE as their only way in'.[:P] [:D]

Actually, I qualify for an E106 but haven't gone through the process of getting it because I want (need!) to carry on earning and, as you know, you can't earn and use an E106. I also have a French wife who is in the system so presumably I could be treated as ayant droit, piggy-backing her status.

As Will says, there are lots of cases where the réel system will be better but it all depends on what you want out of life and what sort of business you are in. My business has hardly any overheads and I'm running down for retirement so I'm quite happy to do the equivalent of one week's work per month. If I went for réel I'd probably need to do twice as much work to get the same net income.

Horses for courses.

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