The month of May in France always means tax return month.

The French tax year is a straightforward, calendar year and the deadline for returning your completed declaration of income earned in 2012 is 27th May 2013. Those of you already in the system should receive your partially completed form (or “préremplie”) at the end of April.

As in previous years, the tax authorities have granted extra time for those who make their declarations on line at http://www.impots.gouv.fr, however, the amount of extra time given will actually depend on the number of the department you live in e.g. 3rd June for depts. 1 to 19, 7th June for depts. 20 to 49 and 11th June for the remaining departments. The online facility will be available from the beginning of May.

For “first-timers” you must collect a tax declaration from your local tax office “Centre des Impôts”, or download one from the website above. If you have moved to France part way through the year, you will only declare income earned since the date of “arrival”. Any tax due is normally collected in September.

Once you have completed your first tax return, you can complete subsequent returns on line at http://www.impots.gouv.fr.

What forms will you need?

Whilst the “Déclaration des Revenus” comprise a variety of forms, according to your circumstances, here are some of the main forms that apply to expatriates:

Form 2042
This is the main tax form, which those of you already in the system will receive, where you should declare your worldwide income and gains.

Form 2042C (“Complementary”)
This is an additional form which is required for a number of situations, including where you have received income from furnished letting or “chambres d’hôtes”, or where you have paid tax in the UK that needs to be offset against French tax.

Form 2047
This is an additional form for any income received from outside of France. Foreign income must be declared on this form, as well as on Form 2042.

Form 3916
This is for details of any bank accounts situated outside of France.

What to declare?

As a French resident, all of your worldwide income and gains should be declared on your French tax return. Any income which is normally taxed out of France e.g. on UK public sector pensions or UK rental income, will still be used to calculate your overall tax liability. The Double Tax Treaty will ensure, however, that you do not pay tax twice on this income, but these figures are needed to calculate the rate at which your other income should be taxed.

What exchange rate to use?

Some tax offices tell people to use the £/€ exchange rate at the end of the year. In theory, you should have kept a note of the exchange rates applicable to your Sterling based income as you received it. However, for income which is received regularly such as a pension, for instance, the authorities will accept the use of the average exchange rate for the year; details of which are made public from various sources, including the official French revenue website noted earlier.
Wealth Tax (Impôt de Solidarité sur la Fortune or “ISF”)

One major change that will affect some people is in respect of ‘Wealth Tax’ declaration.

From this year, anyone with taxable assets of between €1,300,000 and €2,570,000, as at 1st January 2013, will declare the asset figure on their income tax return.

Only those with more than €2,570,000 of taxable assets will have to continue making a separate wealth tax return in June.

If you have any questions on anything discussed in this post please do not hesitate to contact us.

http://www.freedigitalphotos.net/images/acknowledgement.php

Yes, it is that time of year again when we have to turn our attention to completing our annual tax return!

The French tax year is a straightforward, calendar year and the deadline for returning your completed declaration of income earned in 2011 is 30th May 2012. Those of you already in the system should receive your partially completed form (or “préremplie”) at the beginning of May.

As in previous years, the tax authorities have granted extra time for those who make their declarations on line at www.impots.gouv.fr, however, the amount of extra time given will actually depend on the number of the department you live in eg 75 Paris, so please verify first. The online facility will be available from the beginning of May.

For “first-timers” you must collect a tax declaration from your local tax office “Centre des Impôts”, or download one from the website above. If you have moved to France part way through the year, you will only declare income earned since that date. Any tax due is normally collected in September.

Once you have completed your first tax return, you can complete subsequent returns on line at www.impots.gouv.fr.

What forms will you need?

Whilst the “Déclaration des Revenus”comprise a variety of forms, according to your circumstances, here are some of the main forms that apply to expatriates:

Form 2042

This is the main tax form, which those of you already in the system will receive partially completed, where you should declare your worldwide income and gains.

Form 2042C (“Complementary”)

This is an additional form which is required for a number of situations, including where you have received income from furnished letting or “chambres d’hôtes”, or where you have paid tax in the UK that needs to be offset against French tax.

Form 2047

This is an additional form for any income received from outside of France. Foreign income must be declared on this form, as well as on Form 2042.

Form 3916

This is for details of any bank accounts situated outside of France.

What to declare?

As a French resident, all of your worldwide income and gains should be declared on your French tax return. Any income which is normally taxed out with of France eg on UK public sector pensions or UK rental income, will still be used to calculate your overall tax liability. The Double Tax Treaty will ensure, however, that you do not pay tax twice on this income, but these figures are needed to calculate the rate at which your other income should be taxed.

What exchange rate to use?

Some tax offices tell people to use the £/€ exchange rate at the end of the year ie £1 = €1.1972. In theory, you should keep a note of the exchange rates applicable to your Sterling based income as you received it. However, for income which is received regularly such as a pension, for instance, the authorities will accept the use of the average exchange rate for the year; details of which are made public from various sources, including the official French revenue website noted earlier.

Wealth Tax (Impôt de Solidarité sur la Fortune or “ISF”)

One major change that will affect some people is in respect of ‘Wealth Tax’ declaration.

From this year, anyone with taxable assets of between €1,300,000 and €3,000,000, as at 1^st January 2012, will declare the asset figure on their income tax return.

Only those with more than €3,000,000 of taxable assets will have to continue making a separate wealth tax return in June.

If you have any questions on anything discussed in this post please do not hesitate to contact us.