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TAXES

What exactly do I need to tell the taxman about my assets outside France?

The French tax declaration season is now open, but how much do you really need to tell the French taxman about your affairs outside of France? International tax specialist Jason Porter explains some essential information.

What exactly do I need to tell the taxman about my assets outside France?
Photo by PHILIPPE HUGUEN / AFP)

Tax declarations

Every year, anyone who is resident in France (and some non-residents) must fill out the annual tax declaration. Declarations are now open for 2022 – covering your income from 2021.

If you live in France, it’s almost certain that the tax declaration will be compulsory for you, and if you are non-resident but you have income in France (for example rental income from a French property) you will also need to fill out the declaration.

It’s important to note that if you live in France but all your income comes from abroad (eg a UK or US pension), you still need to fill out the declaration. Find the full details HERE.

But the French tax form only covers my income in France, right?

Wrong. This is the source of much confusion to foreigners in France, but actually you need to tell the French taxman about all your assets.

Most jurisdictions operate on the basis that if you are resident, then you declare your worldwide income, and if you are not resident you only declare the income which is actually sourced in that jurisdiction. If that was it, then you could pay tax twice – eg in the UK and France – on the same income.

The Double Tax Treaty between these two states is designed to eliminate this possibility.  As an example, tax paid in the UK on UK rental income is available as a tax credit against the French tax liability on the same income.

Unfortunately, many UK nationals living in France appear to be under the impression they do not need to declare UK source income in France, as they have already declared it (and paid tax on it) in the UK.  This is not the case – all non-French income still needs to be declared on a French tax return. 

The commonest areas of non-declaration are around UK source rental income, UK bank interest and other UK investment income (dividends, etc., from shares and securities in companies and funds).  

In particular, ISAs are commonly missed off French tax returns. Whilst they have tax efficient status in the UK, in France you would “look through” the ISA vehicle, and declare the underlying dividends, interest and capital gains on your French tax return.

What about bank accounts at home?

The French government has recently taken steps to further strengthen its fight against tax fraud, extending the disclosure regulations to also cover non-active bank accounts.

You must now declare all non-French bank accounts and life insurance policies, even if you have not deposited any funds, earned any interest/gains or made any withdrawals. The penalties for failing to declare a foreign account are the same whether it is active or not (and these can be substantial).

This has now become even more real with the CRS (Common Reporting Standards) exchange of financial information between states.  

We are already seeing evidence of French tax offices calling UK nationals in for interviews to discuss their non-declaration of foreign bank accounts, rental income, and capital gains, based upon information provided by UK financial institutions to the French tax authorities.

What are the recent changes about?

This is all happening at a time of a fundamental change in the basis of taxation in France.  

Most other developed nations introduced a form of “Pay-as-you-Earn” taxation many years ago but in France this came in in 2019.

From January 1st 2019 French tax residents have been subject to a monthly withholding tax on their income for that year.  

So do I still have to do the declaration if I am taxed at source?

Yes, for the moment anyway.

This is set to change in the future, but at present most employees still have to complete the declaration – the exception is certain groups whose circumstances have not changed since their 2021 declaration. If this is you, you will have been contacted directly by the tax office, if you have not received a notification you still need to do the declaration. 

When do I need to pay up by?

Tax declarations opened online earlier in April with the deadlines varying depending on where you live in France.

READ ALSO The French tax calendar for 2022 

Any balance of tax due must be settled by the end of the year (penalties will apply for non-payment). Or, where applicable, the tax authorities will refund any overpayment.

If you are an employee and you’ve already had your income taxed at source, you might actually get money back from the taxman if you qualify for any tax breaks or rebates – more details on those here.

Jason Porter is Business Development Director of Blevins Franks Financial Management Ltd.

For more information on the French tax declaration, how to fill in the form and where to find professional help if you need it, head to our tax section HERE.

Member comments

  1. This article was posted two years ago. Is there an update for the 2020 tax declaration?
    Nigel Stubbs

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For members

ENERGY

What households in France can expect in the event of power cuts

The French government continues to insist that power cuts are very unlikely this winter. Nevertheless, there is an emergency plan in place, so here's what it says about power cuts, from length and frequency to warning times.

What households in France can expect in the event of power cuts

Power outages in France during the winter of 2022-2023 are still unlikely, and President Emmanuel Macron has urged people “not to panic.” However, they are still a “real possibility” and if you would like to be prepared for potential power cuts, here is what you should know:

When and how will I know if there’s going to be a power outage?

You can continue scanning the situation using the website and application Ecowatt.

READ MORE: ‘Ecowatt’: How to use France’s new energy forecasting website and app

You will be able to see an ‘energy forecast’ for the following three days – which will put your local area into the category of Green (no strains in the grid), Orange (the grid is strained, consider decreasing energy consumption), or Red (the grid is very strained, power cuts will be inevitable without a decrease in consumption).

If EcoWatt goes red, the first step will be asking businesses to make voluntary decreases, so for example factories could go onto a three-day week.

If this still doesn’t work, then targeted power cuts may be necessary – but these will be limited in time and area and planned in advance.

The government says that power cuts will last for no longer than two hours and will be done on a commune basis – so there will never be a situation where a whole département will be blacked out, far less the entire country.

So how do I know if my area will be affected?

If Ecowatt is red, keep checking it – at 3pm each day it will be updated with any areas that face power cuts the following day.

At 3pm you will be able to see whether your département will be impacted and at 5pm you will be able to check your individual address to see if you are in a ‘load shedding’ zone (délestage in French) – the technical term for a planned outage.

You can set up alerts by SMS and email on both the application and website.

And of course there will be extensive media coverage (including on The Local) of planned cuts. 

How long would the rolling blackout last?

French government authorities have specified that power outages would not occur for more than two hours at a time.

They would occur either in the morning (between the hours of 8am and 1pm) or in the evening between the hours of 6pm and 8pm and would not affect crucial buildings such as hospitals. 

If you are impacted by a power outage on one day, you can rest assured you will not be in a “load shedding area” the following day, power bosses will vary the areas for targeted cuts and no area will have two consecutive days of cuts.

What are the things that might be impacted in the event of a power cut?

There are several every-day items that could be shut off during a power outage that you might need to be aware of; 

READ MORE: OPINION: France faces the real possibility of power cuts this winter and it can’t blame Putin

ATMs and Contactless Payment – If you are in an area that will be impacted by power outages, consider taking out cash the day before. During the power outage, you may not be able to access an ATM or use a credit/ debit card to pay, depending on whether the card reader is fully charged. 

Elevators and digicodes – if you live in an apartment block then both your lift and the electronic door codes will not work. Your building might block access to elevators during the rolling blackout. If you know you will be in an area where power is cut, you might want to consider postponing your heavy shopping trip or furniture delivery to the following day.

Digicodes and access badges also will not work without electricity. However, that does not mean you will be locked out or trapped inside, as the electricity is only used to keep the door locked. 

Shops closed – While supermarkets with generators will be able to remain open, you can expect some smaller shops to be closed during power outages.

Public transport – This will depend on where you live in France, though you can expect some services to be interrupted. Local authorities have been tasked with coming up with their own response plans in the event of power cuts. The French government has asked local authorities to err on the side of caution, in order to avoid the possibility of passengers finding themselves stranded in the middle of a track. As for the Paris Metro system, this will not be affected by power outages. Government spokesperson Olivier Véran told BFMTV on Friday that it runs on “its own electricity network.” You can expect more detailed information in the coming weeks.

Schools – While this has not yet been confirmed, the French government is reportedly working alongside the Ministry of Education to develop plans to close schools in the mornings if the area is to be impacted by rolling blackouts. This would be to protect students and teachers from having to be in the building without access to heating, alarm systems or lighting. Schools would be open again in the afternoons, as power cuts are not set to take place between 1pm and 6pm. 

Phone and internet service – During a power cut, there could be interruptions in telecommunications (both for mobile and landline devices). If you have an emergency, you should still dial 112. As this phone number is accessible regardless of the telephone operating company or line, there is still a chance it will be covered by at least one operator in the area. Call centres for the fire department and the police will continue to function. 

Traffic lights – Like other illuminated traffic signs, these are powered by electricity. It is therefore possible that they will be out of service during power cuts, so consider avoiding driving during a power outage.

Charging devices – If you learn that your area will be impacted by a power outage, consider charging any devices you might need during the day the night before. Keep in mind though that the power cut will only last two hours.

Hot water – If your water is heated electrically, it likely will not be available during a power outage. It would therefore be advised to plan around the two hour power cut for your hot water needs.

Refrigerators and freezers – There is no need to panic here – the power would only be off for two hours, so your food ought to remain protected, as refrigerators can keep cold up to four to six hours after the power shuts off. As for freezers, they can keep their temperature for 24 to 48 hours.

And what won’t be affected?

Priority sites such as hospitals, prisons, police stations, fire stations, critical factories and other emergency services will not experience power cuts.

If your power line also services a priority site, then you will be spared from blackouts. For this reason, people living in urban areas are less likely to be impacted by power cuts than people living in rural areas. As for Paris specifically, the city is so dense and is connected to so many priority sites that only about 20 percent of the Parisian territory could be impacted by power cuts. 

Current estimates show that about 60 percent of the French population could be impacted by power cuts – the remaining 40 percent are either connected to a priority line or are part of the 3,800 “high-risk patients” who are dependent on home medical equipment.

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