Taxation: Properly preparing for your expatriation

We begin by organizing an introductory session during which we shed light on the French tax obligations that individuals are subject to. We delve into crucial aspects such as determining tax residency according to French law and international conventions, potential tax benefits for expatriates, different categories of applicable taxes, procedures for reporting domestic and foreign income, as well as penalties for non-compliance with tax obligations.

When an employee arrives in France, they are subject to an initial neutral tax rate, which is often higher than their actual tax rate. However, through prospective income declaration, this neutral tax rate can be adjusted to reflect the employee’s true income level right from the start of their stay. This approach avoids the one-year delay in adjusting the tax rate, ensuring more accurate taxation from the outset.

We also assist employees in assessing and submitting tax formalities to ensure perfect compliance with tax regulations. Our dedicated team provides personalized assistance for annual income declaration, guiding each client in simplifying their tax obligations.

In France, the impatriates’ regime, governed by Article 155 B of the General Tax Code, requires that the employee meets certain criteria. This regime allows for a partial exemption of income and days worked abroad over a period of 8 years. In addition, we include in our range of services an assessment of the employee’s non-taxable income and the preparation of all necessary documents.

If you are a non-tax resident employee in France, we offer a comprehensive service including the calculation of monthly withholding tax on your salary, preparation of the quarterly withholding tax declaration (form 2494), and submission of the 2041 E declaration to the Services des Impôts des Particuliers (SIP) in France for the following year, along with the non-resident income declaration.

We ensure that our clients’ Real Estate Wealth Tax (IFI) declarations are properly prepared when the net value of their real estate assets exceeds the threshold of 1,300,000 euros. This assistance includes preparing the necessary IFI formalities when required and takes into account any available exemption possibilities.

Lastly, in France, since January 1st, 2019, companies must collect income tax along with social security contributions, applying the tax rate transmitted electronically by the tax administration for each income recipient. This obligation also applies to foreign companies paying taxable salaries to French tax residents, requiring their registration in France. Consequently, we assist both the employee and their spouse in this service.