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Foreign firms without a French establishment

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

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

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

OUR PRACTICAL GUIDE FOR NON-RESIDENTS LEASING FURNISHED RENTALS IN PARIS: PART II

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

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 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

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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Starting a Business in France as a One-Person Company

Starting a Business in France as a One-Person Company

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

Starting a Business in France as a Sole Trader

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

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

FATCA Regulations

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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