If you are an EU based company without an establishment in France, you are a non-resident firm.
Generally, to deduct VAT in France you must also collect it, i.e. you must deliver goods and services subject to VAT. When you have deducted more VAT than you collected, this generates a ‘crédit de TVA’ (VAT refund).
If you are a foreign company without an establishment in France, you are considered a non-resident employer and if you want to recruit an employee operating in France, you will be liable to pay French social contributions.
The Wealth Tax (Impôt sur la Fortune) in France has long been a source of debate. Even today, it remains a sort of ‘tug-of-war’ between the political left and right. It is an applied tax on the wealth of “rich” people, which aims to increase the contributions to the state budget of people who are at the end of their professional career and thus no longer generate taxable income. It is a symbol of differences in ideologies, a point of strong debate between those who prioritize social justice vs those who value rewarding individual merits.
If you rent furnished accommodation, you are automatically placed under the ‘BIC’ tax regime (industrial and commercial income tax) instead of under the regime applied to property income, as you would be if you rented unfurnished property.
This status is also open to non-residents wishing to benefit from furnished rental status. Depending on the income you receive from your leased property, you must register either as a non-professional (LMNP) or as a professional (LMP) landlord.
Paris is a city loved and visited by the whole world. To protect tourism, the government is preserving historic buildings by preventing the construction of new housing. The real estate supply is therefore permanently limited and the practice of renting in furnished houses competes directly with the hotel sector.
As the supply of homes is limited, a rise in rents would make Paris unaffordable for its inhabitants. This is why the administration, wanting to maintain a balance between hotels and private rentals, had to put in place additional procedures for authorizing and supervising rental revenue: this is the ALUR Act of 24 March 2014. As such, the legal flexibility enjoyed by furnished flats has been moderated by the ALUR and the Macron law of 6 August 2015.
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.
VAT representation is not necessary for companies established in the EU but it is for those outside of it.
Unless Brexit provides an exemption from VAT laws, investors will need tax representation when they perform transactions that are subject to French VAT.
This article illustrates the importance of the matter in layman’s terms. Moreover, it examines the measures that can be taken in order to ensure a successful future following the referendum:
Donations of movable and immovable property located in France that are made by non-residents are subject to a donation tax on the free transfer of assets. The tax regime that concerns these donations is the same as that of inheritance: the same tax reliefs, tariffs and reductions apply, under certain conditions.
Liaison office, branch, subsidiary… You should decide on a structure that meets your needs in terms of development (short-term or long-term) and desired level of control for the foreign company (low or high). However, the tax consequences and social obligations for each structure differ considerably, and therefore deserve a short analysis.
If you are looking to expand your activities in France, you will find yourself subject to corporate tax if you have set up a Permanent Establishment.
The sources of income that are subject to corporate tax in France are: on the one hand, those generated by “business carried out in France” [1], and on the other, those that fit the criteria set out in the international Non-Double Tax Treaties.
Incorporation of an SAS
1,600€ (Excl. VAT)
VAT refund for non resident EU firms
500€ (Excl. VAT)
Social representative for a non-resident employer
750€ (Excl. VAT)
CIR accreditation for cross-border R&D projects
1,550€ (Excl. VAT)
Service providers starting as Auto Entrepreneurs in France
300€ (Excl. VAT)
EU firm without a French establishment: How can you get a VAT refund?July 13, 2017 - 4:32 pm
Foreign firms without a French establishmentJune 19, 2017 - 10:55 am
Reducing your French Wealth Tax (ISF) by investing in start-upsMay 9, 2017 - 12:35 pm
Our Practical Guide for Non-Residents leasing Furnished Rentals in Paris: Part 2April 4, 2017 - 2:45 pm
Our Practical Guide for Non-Residents leasing Furnished Rentals in Paris: Part IMarch 15, 2017 - 12:29 pm