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France - Make your dream come true.
As one Reader Said - Arrrgh
Taxation rules in France have always been difficult to understand. Now, since September 2001, with the rapid introduction of new laws and regulations to combat terrorism and drug dealing, the powers now available to all tax authorities are so strong that an error in a tax return can threaten you with the same penalties as if you were laundering drug money or supporting a terrorist group. Inevitably the same laws designed to protect us are being used to raise more funds for an ever increasing and fantastically expensive civil service machine with an inflation proof pension demand which now threatens to absorb more taxes than can be raised by an aging population and a shrinking productive workforce. The most common question we are now getting is from people wanting to invest in property in France and the taxation liabilities which will apply to this. Here are a couple of recent mails we have responded to. We are building a series of features about this and will be posting them on our site at http://francevoila.com/finance/ www.francevoila.com/finance/ ======= Hi Tony - I love your newsletter and have found some really useful advice and information - as well as fascinating titbits - on your site. Many thanks for this wonderful service! I'm writing because having recently bought a flat in Nice (yes - we've followed your advice about buying now!) and wanting to rent it out I am still unsure about HOW to go about registering the flat and registering for any tax we may end to pay on our rental income. I've tried some of your links - but I'm afraid as yet my French isn't quite up to understanding the results - and I don't really want to guess around official stuff.(Part of the reason for buying the flat is to have somewhere to spend enough time to improve my language skills - but I want to rent it out until I can get there myself!) Is there anywhere a simple guide you know of that explains in English the steps I need to take? Many thanks, Su ======== Hi Sue, Sorry for the delay in replying - I am in the middle of a lot of research into this matter for many clients and also for our own peace of mind. We are finding many looming problems for owners in France who rent their homes or have investments here. Following this note is a recent exchange of emails about this topic which, although not giving a clear answer to your question, does have some relevance. I hope to be able to make a series of articles about the French tax system which exposes some of these problems, and hopefully will encouage some of us to take action to correct them. We are not aware of any simple guide, many changes in laws since September 2001 have given Draconian powers to all tax authorities and the risk of abuse and "easy" taxation on capital and savings is too tempting for impecunious and corrupt governments like France. Excellent sites like http://angloinfo.com/ www.angloinfo.com have many up to date features and information which may help. Best wishes Tony Tony, ====== I need information and guidance on French Taxation. I have sent a message of help to Blevins Franks. It is about my Gite (which is part of my home). Are they the best or can you recommend anyone else to help. It is not an easy task finding someone. regards Janis P.S. I have printed out your tax information for myself and find it most interesting but a minefield of course ! Janis ======== Janis, It is much worse than a than a minefield - at least in a minefield you have a chance of walking through it - the tax system in France is closed and the "inspectors" get a commission on how much they can extort from anyone they choose to investigate. With one civil servant for every seven "working" people in France, this is the biggest the only) growth industry there is here. This naturally means these parasites have no interest in the truth, only what they, with enormous powers, decide is your income. You are absolutely guilty until you can prove conclusively that you are innocent, this is very difficult and is likely to cost more than they demand. If your only income is letting part of your own home which is your main habitation then a regime "micro" would be relevant - you declare every single penny you receive and are liable to pay tax on 30% of this sum. You still have to keep every single piece of paper (in French) relating to every transaction (for 30 years), however, it the tax vampires look at your bank account and you have put into your bank more than you have shown on your receipts - they will reject everything and demand full taxation on all the money you received. No matter where is came from, even if you sold a personal possession in this time. The onus of proof is on you and the level of justification is totally insane. In ten years trying to work in this system I have not your found any two accountants or experts who agree on anything, even our own present "expert comptable" has given us three completely different sets of advice in as many months - also do not forget that they are legally bound to reveal everything to the tax authorities, as are all advisors now, and you must not be told of what they show. They are in fact part of the taxation system. All French people I have found, pay pay and work in illegal cash as much as they can, the reason seems to be that it is impossible to work legally in France. Yet your neighbours will happily "denounce" you for a share of the money extorted by the tax inspectors who also get paid a commission. These are the facts I am exposed to every day, not cynical observations, they usually leave you for a few years before pouncing so they get a nice meaty bone. I am horrified at what I am finding in what is basically an antiquated, totally corrupt and unjust system. I am researching this matter and will try to expose this in every way I can. Hope this helps :-). Best wishes Tony ======== Ugggh....agghhhhhhhhh Janis ======== Hi Yes I agree precisely with your feelings - also remember that if you live here for more than 6 weeks (yes 6 WEEKS) a year, you are legally obliged to declare your total world wide income to the French inspectors - if you have paid tax elsewhere and there is a double taxation agreement, you will not normally be taxed twice - but, for your tax calculations, the total income is applied in all countries you have income for the threshold of you taxable income so you are likely to be pushed into a higher taxation level in some places anyway. To protect our society, we must accept some losses of privacy. Unfortunately many of these new laws have given unreasonable powers to civil servants who are supposed to be our caretakers, not out judges. Too little is written about the applications of these Draconian measures now being introduced everywhere, but especially in France, and too much written about the colourful markets, sunshine and amusing "characters" one finds in quaint bars. Now you see why the French have in the past lived in shabby houses and driven tatty cars as well as rarely letting people into their homes. Bonne Chance Tony Ask us anything, we will do our best to help. To contact us please use our...
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