The Inpat Scheme

Image the impat scheme (tax)

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Pay less tax!

France is well known for its strict tax rules. This can often discourage international businessmen and women from coming to live here, especially company managers and other high earning-employees.

However, did you know that there’s a special tax regime for international businessmen and women? In fact, the “régime d’impatriation” (or “inpats” scheme, as opposed to “expats”) is precisely aimed at encouraging international-scale managers to come to France and develop French firms.

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Incorporation of an SAS: 5 errors to avoid

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Investors often ask us about the best way to set up in France. In our experience, our prospects tend to fit one of the 3 following profiles:

  1. For individual craftsmen starting from scratch: self-employed status (le statut d’auto entrepreneur) is the best option, despite certain traps.
  2. For companies who want to be discrete or whose sales forecasts are still uncertain: the SARL is ideal because of the flexibility of the manager remuneration regime. In our opinion this is a temporary solution.
  3. For companies with sufficient financial resources and who want to convey a professional image to customers, prospects, and the French labour market, the best option is to register as an SAS.

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DEB : Company obligations for Intra-Community Trade

european flag

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If you carry out commercial transactions with European Union (EU) member countries or are planning to do so in the near future, this information may be useful:

Within the European Union, most trade is carried out freely, with no formalities and without border control: there is no need to make a customs declaration. However, you must submit a customs declaration of exchange of goods (DEB) detailing all your intra-Community trade to the customs office.

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EU firm without a French establishment: How can you get a VAT refund?

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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).

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Foreign firms without a French establishment

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Who should you appoint to pay your social security contributions?

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.

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Reducing your French Wealth Tax (ISF) by investing in start-ups

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Impôt sur la Fortune

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.

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Our Practical Guide for Non-Residents leasing Furnished Rentals in Paris: Part 2

picture of paris

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Income from a furnished rental: How is it taxed?

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.

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Our Practical Guide for Non-Residents leasing Furnished Rentals in Paris: Part I

Haussmanian building

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Our top tips for leasing a furnished property in Paris.

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.

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The New French ‘Google’ Tax

Google's head office

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‘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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Reverse Charge on VAT for Imports

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Reverse Charge: Important changes you should be aware of.

On 8 November 2016, Parliament adopted the “Sapin 2” law, which provides a framework for the VAT reverse charge on imports.  Article 58 of the law replaces the simplified scheme with an authorisation system due to fears of a strong increase in VAT fraud…

In principle, the VAT due on imported goods is paid by the customs authorities at customs clearance. It is then recoverable from the revenue statements filed with the tax authorities.

The law of December 29, 2014 to amend finances in 2014 introduced the possibility for importing companies to reverse charge when they are liable for VAT in France.

This is useful because it allows companies to not pay VAT when clearing customs. Beneficiary businesses are allowed to declare and deduct the VAT on the n°3310 CA3 form.

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