If I Had a Hammer

September 2017

“If I Had a Hammer (The Hammer Song),” by Pete Seeger and Lee Hays, was written in 1949 in support of the Progressive Movement.

Almost a year ago, I moved to my new office near Place de la Nation. Some tiny details end up meaning a lot more than they appear.

The office is equipped with a plastic shutter protecting the front door that looks and works exactly like the old-fashioned iron shutters that shops and workshops used to have. It is pulled down to close, and pulled up to open. This daily task reminds me of my father, grandfather and great-grandfather's woodworking shop in a southern Paris suburb. I could see a staircase being built, a cupboard being made and many other pieces being created. There was the smell of hot wood, and the wood dust on the floor and in the air. I watched the skilled workers who did not just build but crafted all this beautiful furniture, carving and assembling everything. These men (in those days there were no women) mastered their craft. They were proud of their work when the furniture was done; they shared the feeling of a job well done.

When I see what my son can sculpt with a piece of stone, and see him taking the time to carve, I know that this gift skipped only one generation.

So, in this weird way, I see my writing (whether it is my column or the letters and even the emails I write for my clients) more and more as a craft, an exercise in choosing and assembling the words and keeping things simple. By sticking to this idea I try to avoid the temptation of writing literature. My job is to craft, which means work on it more than once, let it sit, and then go back to it.

What if “Making America great again” (and France, too, for that matter) meant promoting crafts as a discipline in school, with homework being crafted instead of just being done, or crafting the windows of a shops to decorate them. The same concept can apply to web design, creating apps, writing computer programs and so on. I strongly believe that many new jobs are compatible with this approach to working.

If I had a hammer!

THE LATEST COURT DECISION REGARDING RENTING WITH AIRBNB IN PARIS
The message from the French administration regarding vacation rentals has been clear for years: the authorities are cracking down, reining in such rentals and so on. The advice given was, “Do it right or the consequences can be quite damaging.” Given this understanding, the latest court decision I am aware of is mind-boggling, as it goes completely against the conventional wisdom.

A French tenant of an HLM (low-income housing) was renting out her flat from time to time through Airbnb. HLM leases are rent controlled, as they are based on the tenant’s income as well as rent subsidized. The size of such an apartment is supposed to exactly fit the size of the family, and is often a tad smaller. The lease states that it is a breach of contract to have an extra person living there, and of course subletting even a portion of the apartment is totally illegal, resulting in the lease being automatically voided.

In light of all of this, it seemed clear that once this person was caught, the outcome of the court case was certain. But in fact the ruling demonstrated that protection of the tenant goes way too far in France. The ruling noted that the tenant stopped the rentals after receiving the first notice, having pleaded ignorance of the law; that the Airbnb ad was taken down immediately; and, the final straw, that the rent asked for the room was so moderate that it could not be seen as engaging in a business.

This succession of excuses led to the ruling that the person was a lawful tenant and entitled to keep the lease. At this point, I would ask what constitutes an unlawful tenant?

Throughout the Fifth Republic, there has been strong discipline within the parties in terms of voting the way the leadership wants. With the presidential group, it is uncertain whether the same obedience will exist, as it is brand new and its members come from very diverse backgrounds and clearly do not share the same views on several topics. For more info (in French), see http://sosconso.blog.lemonde.fr/2017/06/29/elle-sous-loue-son-hlm-via-airbnb/

FINES FOR AIRBNB-TYPE RENTALS IN PARIS HIT A RECORD HIGH
The total of fines collected by the Paris city hall for illegal vacation rentals reached a record 615,000€ in the first half of 2017, compared with 45,000€ in the first half of 2016 (the total collected in 2016 was 200,000€). The number of owners fined in the 2017 period was 31, with 128 apartments checked compared to 42 in the 2016 period. That means the average fine was 19,839€. Nevertheless, despite the increased risk of being fined, the number of apartments dedicated to this kind of rental is growing in Paris. I have heard that the risk is considered just part of doing business because the amount of money to be made is sufficiently greater than the fine.

Especially in France, where application of the law can differ depending on the context, the parties involved and so on, I can only state that the risk is increasing and there may come a time when the amount of the fine becomes truly punitive, at which point more people will get out of the market.

As the story in the previous section indicates, the court system also makes a huge difference. In particular, the system is likely to mete out different treatment to a French person who lives in France and rents out occasionally, and a foreigner who buys an apartment exclusively for this use and runs it as a business. Is the court decision described above unfair? That is not for me to answer; in any case, basing decisions in this matter on fairness is totally missing the point.

Still, comparing these two situations shows how contradictory court decisions can be. One of the first things one learns in law school is that every case is different and it is the lawyer’s job to find the right angle, precedent and legal grounds to let the client win the case.

I will keep informing my readers and clients about this issue to the best of my ability. One thing is clear: the Paris city hall is on the warpath about this issue and I do not see anything that might change that.

http://abonnes.lemonde.fr/logement/article/2017/08/11/airbnb-a-paris-les-amendes-sont-passees-de-45-000-a-615-000-euros-en-un-an_5171370_1653445.html

A LONG-TIME READER IS SELLING ONE OF HIS BUSINESSES
I almost never open my column to such advertisements; the person needs to be quite close to me for me to consider it. But a very long-time reader recently let me know that he has a business for sale. It is a debt-free, profitable tour guiding business with over 130 TripAdvisor reviews and has received a Certificate of Excellence every year it has been eligible. He is taking on a new project later this year and needs to free up some time to devote to that. The sale price would include formation of the appropriate French business entity for the company. If you are interested, please email me directly.

URSSAF IS FORCING MORE AND MORE PEOPLE TO DECLARE BILLING THROUGH ITS WEBSITE
I have often written about the French administration pushing to use the internet for many things. I have no problem with that when there is an alternate solution, even if it means paying a bit more. On the other hand, I question the fairness of forcing people to use the internet as the only option.

When it comes to declaring employee social charges to be paid, sales tax and so on for established businesses, I believe a CPA or in-house accountant is needed, and they all have access to the internet and are trained to use the relevant applications.

I just learned, however, that 16,000€ in billing is enough to be forced to only use the internet procedure. Many people working out of their homes, having independent work as a side job, make this kind of money.

The entire reason for creating the auto-entrepreneur status was to make it easy for people to enter the business world by doing a side job along with a salaried position. This often applies to retired people, those doing manual labor and so on, who may not be that savvy with computers and internet applications. Furthermore, I found the app not user friendly at all.

I think the income limit is way too low for the population potentially affected by the decision – especially foreigners, whose French may not be sufficient to understand what is being asked of them. Many Americans, for example, confuse the SIRET number – the tax ID number for a business, regardless of its size – with the SECU number, which is the equivalent of the Social Security number used for health coverage and retirement benefits.

FOR THE FIRST TIME, I HAVE AN ASSISTANT
When I worked with Isabelle Russo as part of the Alliage company, we managed to deal with reporting and some bookkeeping issues for very small businesses. Several of my American clients wanting to live in France chose self-employed status, as it is easier to obtain immigration status with it, and lately has also made it a little easier to obtain employment, now that the auto-entrepreneur status has become popular.

In 2016, ALLIAGE closed, and this teamwork ended, so I quickly struck up a relationship with a fully licensed French CPA (expert-comptable-commissaire aux comptes). But this did not address the needs of people earning less than 32,000€ in gross sales, with the micro BNC fiscal status. They are exempt from doing full bookkeeping but still have to file declarations of income to the tax office and to RSI for social charges. Managing payment of the social charges and understanding how it works can be quite complex. I do some of it when people initially register, because almost all these documents are needed to obtain the related immigration status. After that they should be autonomous, but in fact most of the time they are not. There has always been a real need for this level of help, which is below what the French CPA does professionally but which I am not really equipped to handle efficiently, especially considering the level of my fees.

Therefore, starting this month (September), I will be working with an assistant so as to add this service for those who need help handling the French paperwork, basic French administrative procedures and so on. I will give her name and information upon request. Her fees are between one-half and one-third of what I charge, depending on the level of services requested. Of course, she works under my supervision, so I guarantee the quality of the service, and she will keep her files in my office.

TAX OWED ON 2016 INCOME IS DUE SEPTEMBER 15th
Could this be the last time in French history that people pay their income tax in the traditional three installments on February 15th, May 15th and September 15th? The system is set up so that on each of these dates, people pay part of the total tax due, usually in three approximately equal installments. The first two payments are each equal to one-third of the tax owed the previous year, since the tax collection agency, the Trésor Public, does not know the amount for the current payment year until it is notified by the Centre des Impôts, which receives the income declaration of the previous calendar year in the spring. There is a special office in the Parisian suburb of Créteil for residents of Paris. It used to be that these two divisions of the French fiscal administration had different locations. Today they share the same buildings, but still function as separate entities.

Until the presidential election last May, the plan was that everything would be ready on January 1st 2018 to switch to a new system. France is one of the last Western countries where income tax is paid by the individual directly and not withheld by the employer. For many cultural and historical reasons, the French are reluctant to change this set-up, but all of them are not enough to explain why it has not yet been done.

There is only one technical reason that withholding tax would be very difficult to arrange, and that is the concept of the quotient familial. I believe France is the only country that taxes the family as a group rather than individuals. This means the amount of tax you owe changes if:

You get married,

You get divorced,

You have a child,

The child leaves the home,

A family member dies,

A family member becomes disabled.

Both during the presidential campaign and after President Macron was sworn in, he has expressed his doubts about how pertinent the new set-up is. It is clear that there is a powerful arm-twist challenge between the president and his cabinet, on the one hand, and, on the other, the French fiscal administration, which has worked on this project for years and supposedly is totally on schedule. Everybody should follow this issue very carefully.

Best regards,

DIFFERENT TYPES OF RIGHT TO WORK AS AN EMPLOYEE

QUESTION

I just went through the OFII physical as a tourist and a consulting firm here in Paris made me an offer this morning as a 60,000€ salaried employee to start next month and they have agreed to sponsor me for a work permit. One of my questions is what is the name of the work permit that I need to ask for on the prefecture forms? Is it a carte de séjour salarié? There is one additional question I have now. My new employer said that with his other employees who needed work permits (I know they had cartes de séjour salarié), he was able to get them started working at their new job once the paperwork was submitted, even though the permit was yet to be issued. He said that there was never a problem with it. The permit was always issued. Do you recommend that I not to go this route and, instead, wait till the process is complete?

 


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ANSWER

These are two completely different issues. The job offer demands a change of your immigration status. Your current immigration completely forbids you to work in any capacity in France, so you have to wait until the procedure is complete to start working in France for them.

Defining your current status will make it possible to understand whether you can take this job and when.

1 – Holding an OFII stamp after going through a physical makes you an immigrant
This means you started the process at a French consulate asking for a long-stay immigration visa of the visiteur type. In this case you are in France as an immigrant, not a tourist, and you have the immigration ID to prove it, the OFII stamp.

2 – Statement under oath that you will not seek employment
You can tell the prefecture as often as you like that this firm came to you and you were not looking for a job in France, but they will not believe you. The prefecture accepts no request for an immigration status change until after the first renewal. For now, you have an obligation to comply with the statement you signed at the consulate. It was the critical document that allowed you to get a visa.

3 – Procedure to obtain employee immigration status
I remind you of the statement you made under oath that you would not seek employment. Putting this aside, it takes several months to complete the employee immigration status process.

First you must obtain an appointment to submit your new request and a complete file, composed mostly of documents from the employer. Currently in Paris, North Americans can expect to wait five months for the first appointment.

The prefecture then sends the file to the local office of the Ministry of Labor, called DIRECCTE. This can take from a few days to over a month, most commonly the latter.

Once the file reaches DIRECCTE, its Main d’Oeuvre Etrangère office reviews the request. It has a veto right and uses it freely unless the request falls into a preferred category. The office is supposed to hand down its decision within two months but there are no consequences if it takes longer; this rarely happens, but still.

DIRECCTE then sends its decision to the applicant, the employer and the prefecture, after which the employer pays the OFII tax of 55% of the gross monthly salary, with a ceiling of 2.5 times the minimum wage (SMIC).

That done, the prefecture contacts the applicant to finalize the request for a new carte de séjour at last.

4 – The passeport talent carte de séjour is the way to go for you
On November 1st 2016, new legislation was implemented that created the passeport talent carte de séjour, thereby completely changing the former artistic, scientific, expertise and talent cards. The card known as the European Blue card (carte bleue européenne) was also put into this category. There are several requirements:

1. The gross annual salary must be at least 52,800€.

2. The applicant must hold at least a three-year university diploma or have five years of professional experience in a position similar to what such a diploma would qualify one for.

3. The French employer’s offer (labor contract) is for a minimum of one year.

The only thing I am not sure of is your university diploma, but I assume you have one.

In this case, the procedure is very different. Only the prefecture is involved and DIRECCTE does not have any decision-making power. The applicant must submit the request a minimum of two months before the immigration status expires. Furthermore, at the Paris prefecture the file can be submitted without an appointment. Thus this procedure is a lot faster – perhaps not 30 days, but generally about a couple of months, which is much better than the nine months I estimated above. Also, the applicant complying with those requirements has almost 100% sure to obtain the immigration status.

The last piece of good news is that because this card is for highly-paid management positions, what should have blocked you from submitting any request for a change of status, are greatly downplayed, when they are just not be held against you. So, this is still far from being a sure shot, but it is certainly better than the salarié procedure. You should explain it to your employer and get the appropriate list and forms from the prefecture regarding this new immigration status, making sure you state its name, la carte de séjour passeport talent, carte bleue européenne).

I have already answered your question about starting work right away: it is simply impossible and would be a huge violation of the law as well as definitely jeopardizing your request for change of status.

THE PREFECTURE ISSUES THE RIGHT IMMIGRATION STATUS
QUESTION

I submitted a request for a change of immigration status. I was a student for a few years with the related immigration status and I wanted to start my own business. The prefecture told me that my card was ready so I picked it up and it was all wrong. It said visiteur when I asked for merchant, commerçant. How can they make such an error? I offer services to small businesses with their websites, flyers and newsletters both in French and in English. What I find weird is that it also says profession libérale on the card.  

Can you explain any

 


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ANSWER

If you had learned the various types of carte de séjour and their subcategories, you could likely have avoided this question. The prefecture did exactly what it was supposed to do, and you have the right carte de séjour for the business you are running. An extensive explanation is needed to understand why this card is the right one. There are currently 6 types of immigration status:

1 visiteur

2 salarié

3 étudiant

4 vie privée et familiale

5 commerçant et artisan

6 Passeport talent.

For some years you held the third status, étudiant, because your main activity was studying full time. Then you wanted to change the main legal reason you live in France. So you put together a file that was intended to convince the prefecture that your business idea was viable. You presented your education, your professional experience while you were a student, and maybe even before in your own country; you secured several clients; and finally you showed that you had the means, especially financial, to launch this business.

In the course of all this, I assume, you filled out some forms, probably the wrong ones, and gave the documents requested for the commerçant immigration status. The entire file needed to request this immigration status is much more extensive than in the other cases and requires a lot more information.

Undoubtedly, when the prefecture reviewed it, they immediately saw that the nature of your activity is to deliver services and create visuals and written content, which is not commercial by the French definition (i.e. buying products in order to sell them at a higher price). The outcome of your request was that you obtained a carte de séjour that corresponds to your business, having provided enough documentation to validate your request.

The Paris prefecture got rid of the word visiteur on the carte de séjour several years ago, thus avoiding this misunderstanding. Elsewhere, even though the word has been kept, most people are aware of what such cards are for, and so pay less attention to the visiteur and more to the words profession libérale, which is really what they want.

I would like to offer a possible explanation for your error. You looked at the six possible types of carte de séjour and thought Commerçant was the only one that meant creating your own business. I hope you can see how incredibly lucky you are. You asked for a status that you were not entitled to and the prefecture could have refused to issue any immigration status, forcing you to leave France. This is nothing short of a miracle: it is rare that the prefecture issues a different carte de séjour than what is requested. Count your blessings and thank the prefecture profusely for having fixed your mistake.

LOST KEYS? – CHANGE THE LOCK!
QUESTION

I have lived in Paris for a few months. I was robbed last night and they got my apartment key. It's the kind where you have no option but to order a replacement key for 140 euros. My roommate still has one, luckily, so I wonder: is there a shady dude who will copy it for 50 euros or something?

ANSWER

You seem to have completely misunderstood the problems you face right now. Let’s review the biggest ones, which are considerable:

1 – You have been robbed of your apartment keys.
All insurance policies issued in France specify that you are responsible for any robbery that takes place if there is no break-in (e.g. if you leave a door or window open, or the robbers use a key). That means you will receive no compensation for the loss of anything stolen if someone enters your apartment with a key. This is very bad news, although it does not seem to be bothering you.

2 – There is no point in making a new key. You must change the entire lock.
The implication of the explanation above is that if you want to be insured against any future break-ins, you must change the lock and make new keys for your roommate and anyone else regularly entering. A lock complying with current French insurance requirements will cost around 1,000€. These so-called three-point locks, secure the door in three different directions: A metal bar goes up into the top doorframe, another goes down into the floor and the third slides sideways into the usual lock emplacement.

3 – Keys from reputable lock manufacturers have ID numbers.
The reason it is so expensive to duplicate keys for three-point locks is that only the manufacturer can make them. They cannot be duplicated the old-fashioned way, where a machine copies an existing key. The modern keys are too complex for that, so only the manufacturer can recreate them. Often foreigners who rent a Parisian apartment are surprised to get full documentation regarding the lock.

4 – It’s a side issue, but it should go without saying that you ought to report this incident to the police.
You were robbed: you were pickpocketed or someone grabbed your bag or purse, or broke into your car. This must be reported to the police if you are to get new copies of any missing official documents – French ID, driver’s license, carte vitale/health card, and so on – many of which cannot be replaced without a police report.

If you were the victim of violent or deceitful behavior, and this can be established in the police report, your insurance policy may cover some of the costs you will incur to replace documents and maybe even the lock. Considering how much the latter costs, it is worth trying.

I hope you can see that the real issue is not choosing between having a new key made for 140€ or a poor duplicate for 50€. Your valuables, if not your peace of mind, must be worth a lot more than that. Your smartphone alone probably cost more than having the manufacturer make a replacement key.

DISCLAIMER

Please forward this message to all those who would be interested in its contents. The information contained in this newsletter is intended as exclusively general information. Therefore, I strongly urge readers to seek professional guidance concerning the legal and tax matters mentioned. This newsletter is intended as a general guide and is not to be taken as professional advice


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