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The New French ‘Google’ Tax

Google's head office

REF.: 0046

‘Google Tax’: How will it work in France?

The new “Google Tax” is intended to counter the methods used by multinational corporations to avoid paying tax in certain countries, particularly in the field of e-business where the location of profits is out of the control of sovereign states.

This tax is based on the Diverted Profits Tax recently introduced in the UK which came into force on 1st April 2015. A draft was introduced by Socialist deputy Yann Galut, which was passed by the National Assembly on 22nd November 2016, and therefore included in the budget bill for 2017.

However, to complicate matters, the Senate rejected it upon first reading on 30th November 2016. A Joint Committee will now be in charge of finding a common text.

The tax will affect the following:

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Starting a Business in France as a One-Person Company

business man with a magnifying glass

REF.: 0044.2

What you need to know about starting a One-Person company in France.

The one-person company has a legal personality and its own assets. In fact, the sole partner limits their financial responsibility to just contributions. Another advantage is that it operates more easily because it is comprised of shares.

On the other hand, these companies must respect particular legal formalities outside of their constitution (establishing articles of association/bylaws) and throughout their social life (holding Annual General Meetings/AGMs) as well as more cumbersome accounting obligations than those for a sole proprietor, making them costlier.

There are two forms of associated corporation possible:

  • The EURL (a one-person limited liability company)

OR

  • The SASU (a simplified shareholder company)

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Starting a Business in France as a Sole Trader

captain vector in business man hands

REF.: 0044.1

Our insight on starting up as a Sole Trader in France.

The company set-up for a Sole Trader does not have any legal entity and does not own its assets. There is actually no distinction between the sole trader’s own assets and those of the company. This therefore means that property, developed or undeveloped but linked to the Sole Trader, is liable to be seized by creditors. In fact, the financial capacity of the company is only limited to the personal circumstances of the entrepreneur. We therefore advise against this type of set-up for an activity which is relatively capital-intensive.

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Starting a Business in France as a Micro-Enterprise

someone ready for a race

REF.: 0044.3

Setting up as a Micro-Enterprise: What should you know?

When looking to setup a business alone, there are two possibilities available to you:

  • Applying in your own name (either as an individual business or a micro-enterprise)

OR

  • Creating a one-person company (either as an EURL – a one-person limited liability company or a SASU – a simplified shareholder company)

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Fatca regulations in France

money inside handcuffs

REF.: 0043

Your guide to negotiating the FACTA while in France.

In order to open a corporate bank account in France, you must comply with certain rules beforehand. The FATCA (Foreign Account Tax Compliance Act) is an American law which was created in 2010 on March 18th. Its aim is to collect and store information in order to combat fraud and tax evasion.

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Intrastat System

parcels around earth

REF.: 0042

Intrastat: What is it and how is it relevant to you? We answer three frequently asked questions.

 

The Office for National Statistics for the European Union, Eurostat, collects data concerning the trade of goods on an intra-EU level (Intrastat). The goal of these statistics is to permit an analysis of the individual market and their policy development with regard to the single market.

In fact, European firms, which are subject to VAT and whose yearly amount of purchases or sales are above a certain threshold, must fill out detailed accounts of their transactions with other EU member states.

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The ATAD (Anti-Tax Avoidance Directive)

gavel on money

REF.: 0041

Important information about the ATAD regulations.

The ATAD (Anti-Tax Avoidance Directive) is a European guideline that was published in the Official Journal of the European Union on July 19th 2016.

Member states of the European Union must pass this directive as a national law before January 1st 2019.

The following evaluation will help you to understand the principles by which this directive shall issue new regulations which will be put into place, in France, from January 1st 2019.

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Social Charges: FNAL Contribution

houde vector inside 4 hands

REF.: 0040

Employers: All you need to know about the FNAL contribution.

The law n°2015-1785, registered on the 29th December 2015, brings about a 3-year tax payment as an FNAL contribution at a rate of 0,50% on employees’ salaries for firms which employ a
workforce of 20 employees or more through the years 2016, 2017 and 2018.

The FNAL contribution (Fonds National d’Aide au Logement), a tax used to support people for housing purposes, is a contribution to be paid by all employers whatever the size of the business.

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Incentives to Increase Employment in SMEs

man climbing the steps

REF.: 0038

Financial Help and Tax Credits to Increase Employment and Business Competition in France

Often France is considered as the land of tight fiscal policy, a country lumbered with high taxes with little room for manoeuvre. This, however, is often not the case and there are several financial aids and tax credits which are designed to improve employment opportunities and facilitate healthy business competition between firms by decreasing the social charges which companies are currently under the impression that they have to pay.

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How to suspend VAT payments on imports

containers

REF.: 0036

Your guide to cross border trade and VAT payments

If you are a company performing operations relating to cross-border trade and you are subject to French VAT, you must settle this tax as soon as these operations cross the border, in accordance with Article 293 A of the CGI. As long as you meet the conditions for the legal right to reduce the amount of tax that you are required to pay, you can deduct this tax on declaration of the company’s turnover for the following month after this legal deduction has been confirmed.

Businesses which export, because of the nature of their economic activities, have VAT credit advantages.

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