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Paid in the US, living in France?


samdebretagne

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I've done a search here and on several other forums, and can't seem to find a clear answer, nor can I really afford to see a specialist in Franco-American tax matters at the moment, so I'm hoping someone here will have already been through this.

If am I hired full-time by an American company and paid in the US, but live in France, what taxes exactly will be due, and to whom?  Just income tax?  Income tax plus all the charges sociales?  Would I still have to pay in the US if I am considered to be a fiscal resident in France?

It's a good job offer, but is a lot less attractive if I'll need to be paying 40%+ to the French gov on top of losing ~30% due to the exchange rate....Nor do I want to be doing stuff under the table, if I do this, I want it to be the legal way.

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With respect. I dont think you can afford not to see a tax specialist.

I am not a qualified specialist, and neither is anybody else likely to be who gives free advice. My understanding is that in general (there are specialised exceptions) if you do the work in France then you have to pay taxes and social security charges in France, either as an employee of a French company or as a self-employed person. The alternative is a portage company. That may simplify the paperwork, but you still have to pay your dues, plus the portage company's fees.

 

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I can only reiterate what Marina has said with the added proviso that, as I understand it, the USA is one of the few countries which insist on taxes being paid to them even if the payee resides elsewhere - this happened to an american girl-friend of my son.

Sue

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Thanks Marina, that's unfortunately what I thought.

And Sue, I'm obviously no tax expert either, but I thought the tax treaty between France and the US allowed for around $80,000 to be made in France before you had to pay any tax on it in the US.  And with the way French salaries are, I doubt many of us expats are making anywhere near that much!  *S*

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[quote user="Spg"]I can only reiterate what Marina has said with the added proviso that, as I understand it, the USA is one of the few countries which insist on taxes being paid to them even if the payee resides elsewhere - this happened to an american girl-friend of my son.[/quote]I also agree that you should look for expert advice.  You won't necessarily pay US tax on all your income if you

live in France; there is a US/France tax treaty, which means that each element of your income should be taxed in one country or the other, but not both.  But you may need professional help to make sure that this happens.

Anyone who is a citizen of the USA is required to file a US tax return, regardless of residence; this presumably applied to Spg's son's girl-friend. 

PS referring to Samdebretagne's post: I'm not completely sure, but I believe that the $80,000 is an exemption for foreign earned income that applies to anyone filing a US return - I don't think it has anything to do with the tax treaty, or with France in particular.

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A big issue is not the US taxes or social charges you may need to pay - but those that your employer probably needs to pay to the French govt for you to be employed in France.  I'm assuming that you have to pay French social charges as you are permently resident here rather than being here temporarily.

The company needs to be made aware that c. 30% of your gross salary must be paid as the employers' social contributions to the French gov.  I'd imagine this will come as quite a shock to American employers.  If you can, get them to take responsibility for paying this from the very start as it is a huge burden otherwise.  We negotiated that my husband's employers would give him the full wage (gross + equivalent they pay in UK National Insurance) and he'd pay their charges (30% v c. 15% in the UK) so he hands over an enormous proportion to the French gov each month, but it is out of a decent London wage, so we cope.  Obviously it is well worth doing your sums before you even think of accepting. 

http://www.net-entreprises.fr/html/foreign_companies.htm  might help as a starting point.  It is a really simply offical guide - in English - for companies who do not have a place of business in France but must pay Social Security contributions for employees who are subject to the French Social Security system.  It might be a good place to start for the French side of things and doesn't appear to be limited to EU companies.  We've found Urrsaf really helpful, so it is well worth giving the contacts listed here a call first before spending loads on expensive international accountants.  At the end of the day, domestic tax offices should have this information.   They should also be able to give you a estimation of the social charges the employee needs to pay so you can calculate your take home pay.  I can't remember exactly what my husband takes home, but it is around 2/3 of his total pay pack (i.e. gross plus the UK NI payments from his employer).  If you're the kind of person who gets het up about paying taxes, it's not a happy place....

Can you also try calling the US tax offiice to see what, if any, taxes you'd need to pay to them in this situation?  We have found the whole situation relatively straightfoward, (if financially painful!) once we got the right form.  At least then if you have to pay for specialist advice, you can be a bit more focused.

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Okay, I went to the URSSAF this afternoon, and they told me that since I will be getting paid in the US by an American company, I won't have any charges à payer because I won't fall under the régime français, as one pays all of the charges in the country where one is PAID.   We looked at the site provided by Pangur together, and her reasoning was that that applied only to people working for foreigner companies, but who were paid in France. 

Surely this can not be right?

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It is not true for British, so I don't see why it should be right for Americans. It just shows that you can't always believe what one official tells you, you need to get several answers. Or get the one that suits you in writing and signed.
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Try calling the URSSAF number given on the weblink - those in your local office mightn't be the best ones to ask.  We live on the border of Switzerland, so people/officials are quite clued up locally about cross-border taxations, but this is probably not the same nationally.  Perhaps it is a very different regime for US based companies, but it seems a bit weird that you could get away without paying...

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