I would like to wish all of you a great summer and a very nice vacation.
"Hit Me with Your Best Shot" is a song written by Canadian singer/songwriter Eddie Schwartz, and recorded by American singer Pat Benatar in 1980 on her second album Crimes of Passion. In view of the recent tragedies, I look at the message and lyrics of this song and I see many violent images. Poetic images are used all the time and they often give a better explanation, a better illustration of a situation than words do. This song is all about a woman in love and there is not an ounce of real brutality in it. All the same, the title and the lyrics use a language that, if taken out of context, would be seen as rather savage.
HATRED - VIOLENCE & INTOLENCE
During my twelve-day vacation in the USA, I visited a longtime friend in Waterbury CT. She invited my wife and me to the 28th Annual Lobsterfest of the Sandy Hook Volunteer Fire & Rescue in Connecticut. While we were there, she introduced us to many former students of Sandy Hook Elementary School, where she had been a student herself. At the end of the dinner, I asked where the school was in which the December 2012 shooting had taken place, and she answered: "Right behind you " they tore it down to rebuild a new one!
Too often people are blas about this kind of news until they are personally affected in some way. Being a French person living in France, I stay away from the debate regarding mass shootings, which happen all too often in the USA. But because of the personal connection, the Sandy Hook one hit me hard twice. Learning that I was having a great time a few yards away from that school cast a pall on the rest of my evening, to say the least.
On June 17th in Charleston, a white man attacked an African-American church, killing nine people. The incident brought back memories of the Civil Rights movement, of African-American churches burning and people being killed. This is another tragedy, an expression of pure hate.
When my family visited Charleston in 2006, the four of us spent several hours at the Confederate Museum. It is a small space but there was so much I wanted to learn, to understand, as the story is almost always told from the other side. Clearly, this period is still alive for part of the population.
Are all expressions of hatred the same? Absolutely not! At the same time, such intolerance, hatred, discrimination and racism is unacceptable. At roughly the same time as the Charleston shooting, an elementary school on the French island of Corsica was forced to cancel the year-end school party because the teachers received death threats after deciding to have the children sing John Lennon's song "Imagine" in five languages, including Arabic.
RETENUE LA SOURCE INCOME TAX WITHHELD BY THE EMPLOYER
France is one of the last Western countries where income tax is paid by the individual directly and not withheld by the employer. There are many cultural and historical reasons why the French people are reluctant to change this set-up, but all of them combined 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 set up. It is called thequotient 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, and/or
- – A family member becomes disabled.
These events occur frequently enough in the course of a lifetime that if France had withholding taxes, such happenings could significantly change the amount withheld. A withholding system works well only if there is just a small discrepancy at the end of the year. This is why the French system prefers to have taxes paid in three installments. The first two, in February and in May, are calculated on the amount owed the year before, and the last one on the amount of taxes owed for the year.
Now, however, the government is determined to have a new withholding system go into effect on January 1st 2018. Neither employers nor employees are very happy with this. Employers do not want an extra task to complicate the French pay slip even more. Employees do not want the change, as it will mean the employer will know much more about their private lives. Employees will be required to inform employers right away of any of the abovementioned changes in their life. The employers will then be obligated to inform the tax office to calculate the new amount owed. Considering the level of distrust that French employees have toward their employers, this could create major difficulties.
It is going to be interesting to see if this measure actually goes through. Most likely it will, but I can see a lot of problems arising from it, and there will be a lot of unhappy people in France before everything settles down.
OFFICE STAYS OPEN DURING THE SUMMER!
I have not scheduled trips this summer, but expect some absences between Friday July 17th and Monday August 17th. I will take a few extended week-end trips.
I would like to remind everyone that there is no August issue.
THE FRENCH WEALTH TAX
I am a recent subscriber to your newsletter, which I find very interesting, informative, and frequently helpful. My wife and I own property in Paris, where we live about six months per year three months in the spring and three months in the autumn. We are mindful of, and studiously comply with, the 90-day tourist visa waiver program limits. Our question concerns the French wealth tax. Could you explain 1) generally, how it works, 2) who is subject to it, when, and to what extent, and 3) whether staying in France more than six months per year increases the risk of exposure to the tax. Thanks for any information you can provide on a subject that everyone seems to have a different, and conflicting, opinion about.
To clarify and maybe keep this issue simple I would like to differentiate fiscal residency for income tax purposes and how the wealth tax calculation differs depending on whether the person is a fiscal resident of France or not.
You are a French fiscal resident if:
- – you stay in France for 183 days in a calendar year, whether you have legal immigration status or not
- – you have immediate family members (spouse and/or minor children) who reside in France
- – you have a French employer
- – you run a French business, even something like tutoring schoolchildren in English
Clearly you two, as a couple, have been careful not to fall into one of these categories. You stay in France no more than 90 days each time you are here, and you come twice a year. This means you are always under the 183-day calendar year limit that would make you a French fiscal resident. No matter how many years you maintain this pattern, as long as everything else is compatible with your non-fiscal residence status, you will maintain that status.
The way the wealth tax is calculated depends on whether the person is a French fiscal resident. I would like to use a practical example to illustrate my point. Let us assume the apartment you own in Paris is now worth a tad more than 1 million euros and there is no loan attached to the property. As fiscal non-residents, only your real estate assets in France are used to figure whether your French net worth makes you subject to the wealth tax. The tax starts at 1.3 million euros net worth. If my assumption about the value of your property is correct, you are not subject to this tax.
If you were French fiscal residents, however, the property would be your primary residence and its value for purposes of tax calculation would be discounted by 20% for a market value in this hypothetical case of 800,000 euros. On top of that, your worldwide liquid assets would be added to determine if you were subject to the wealth tax. If your foreign assets " savings, mutual funds, retirement accounts and stock portfolio in the USA " were worth around $600,000, you would be subject to the wealth tax, given the current exchange rate.
You should calculate your net worth, as defined above, at the end of each year so you are certain that it does not exceed the 1.3 million euro limit.
If it does, you must fill out form 2725 and file it every year before June 15th, attaching a check to the declaration for the amount owed.
The first declaration is supposed to be done at your initiative in a "goodwill" procedure. Often, however, the tax office conducts audits, starting with the value of real estate you own in France, then your residency status, and then the balance in your French accounts. If they send you an audit letter, it means they know your net worth exceeds the limit, and if you have not filed, it is tax cheating, with all the related consequences. In succeeding years you always receive the form, and it is virtually impossible to get out it as it is assumed that in France no one's assets ever go down!
Here is how the tax is calculated:
|BRACKET||BASE (euros)||RATE (%)|
|1st||Less than 800,000||0%|
|2nd||Between 800,000 and 1,300,000||0.50%|
|3rd||Between 1,300,000 and 2,570,000||0.70%|
|4th||Between 2,570,000 and 5,000,000||1.00%|
|5th||Between 5,000,000 and 10,000,000||1.25%|
The fact that one's net worth is taxed between 800,000€ and 1,300,000€ when the current tax-free ceiling is 1,300,000€ looks like an oddity, and it is one. This tax is politically loaded, so it requires a historical explanation. In 2011, the ceiling was raised by a conservative government trying to please its electoral base. It kept the old brackets in order not to appear to favor the very wealthy by French standards. So in May 2011, shortly before the declaration had to be made, the government made this change and it has remained up to today.
There are two other issues I would like to address regarding this topic. The first is good news: even if one is a French legal resident, the wealth tax does not kick in before five years of residence.
The second is more like bad news: the 183-day limit that defines the French fiscal residence is more an indication than a rule written in stone. The tax treaty defines the domicile as the place where the person spends most of his/her time. This is the true concept that the French tax authorities use. So, for example, if you spent just under six months in France, then three months in the USA, a month in Canada skiing and two months in Jamaica for the sun, you would be a French fiscal resident: France is where you spend most of your time, even though it is less than six months. On the other hand, how are the French authorities to know where you spend your time outside of France?
Clearly the wealth tax is complex, but knowing the value of the real estate you own in France is a safe place
ABOUT THE FRENCH SOCIAL SECURITY NUMBER
I would like to make a comment about your explanation of the French social security number in the April 2015 issue.
I received mine long before my wife got hers. The delay was caused, according to what I was told, by the failure of the local town hall in the town where she was born in the USA to provide the sequential line number in the registry book. INSEE sent the letter requesting this vital number and nothing happened until they heard back. To fix the situation I sent two registered letters, one to CPAM asking them to try again and another to the town hall in the USA imploring them to respond to the request when they got it. This Wikipedia article explains that the last three digits correspond to the applicant's birth order in a given place:
I published the Q/A "THE FRENCH SOCIAL SECURITY NUMBER" in the May 2015 issue. This said, thank you very much for your message providing more precise information regarding the French social security number, as issued by INSEE. The Wikipedia page indeed describes how the last three digits of the ID number are defined. What you say is true when it comes to people born in France, whether French or foreign. As France has a special code for each city in the country, it is easy to add three more digits for birth order in a particular commune and month. The system has a limit of 999 men and 999 women born in the same month in the same city, which looks quite reasonable.
I was describing the issuance of this ID number for people born in a foreign country. This makes a world of difference. For people born in a foreign country, the social security number includes the code of the country, not the city. With populous countries such as the USA, if one used the birth order reckoned for the number of people born in each city, one could end up with two or more people having the exact same French social security number. This is absolutely unthinkable; France loves its math so much that it would never take the risk of this happening, regardless of how low the odds might be. I am sure that this rule is not applied to those of foreign birth.
Now, to be clear, YES, I confirm that INSEE sends a request to the city of birth to confirm the veracity of the original document the applicant submitted to the CPAM. Furthermore, the CPAM often adds another demand, which is that the birth certificate bears the Hague Apostille certification, which makes the document official internationally. This is the highest level of authenticity an official document can have. Even with all this, the French administration still wants confirmation of authenticity. By the way, this illustrates how extreme the pursuit of accuracy by the French administration can be. It may put into perspective the demands of the prefecture when it asks to see original documents!
LOSING FRENCH RESIDENCY WHILE BEING MARRIED TO A FRENCH
I'm leaving France to move to Australia in six weeks, but my one-year family carte de séjour is still valid until October. I might want to return to France in a year or two. Do I need to do anything regarding my carte de séjour to make it easier for when I return? Or do I just let it expire? I'm Australian and I am married to a Frenchman.
The first thing I have to say is that you can only have one legal residency. It would be illegal for you to claim that you reside in France and Australia at the same time. But let's look into the situation that you would create if you decided to try this anyway.
It would be possible " difficult, but possible " for you to have the documents needed to renew your " carte de séjour " in October 2015, as long as your husband accompanied you. You could even have a friend or family member vouch that you lived with them, which might even technically be true at the time you came to Paris to submit the prefecture request. And you would have one of the most important documents, the French income tax statement for the previous year's income i.e., for 2014. So, clearly, you would be able to fake it successfully in October 2015.
Now, let's look at what would happen in October 2016. Let's say that you and your husband stay just one year in Australia. At that time your proof of address would be genuine, but you would not have the French income tax document for 2015, unless you claimed two fiscal residencies, which would be prohibitively expensive. The prefecture would deny you the right to renew the " carte de séjour ", but since you would be living in France with a French husband, the prefecture would issue a new " carte de séjour " under the provision in the CESEDA code, article L313-11-4.
I would like to take a look at your question in another way. The course of action you are considering would be not only illegal, but also expensive i.e., two round trip tickets between France and Australia, to start with as well as uncertain: what if the prefecture asks for more documents and gives you an appointment two months or more later?
On the other hand, it is legal, easy, cheap and safe to ask for an immigration visa at the French consulate in Australia when you are ready to live in France again, based on the provision that you are the spouse of a French citizen. I fully understand your concern, and your fear of letting go of your French immigration status, especially if you fought hard to get it; it may feel like it was such a miracle that you got it the first time that you fear you will never get it a second time.
But you have lived long enough in France to understand what a French file is made up of. The dreadful experience of getting your card should have taught you a lot about what is expected. Also, you will be asking for a visa and not a " carte de séjour ", which is always easier. I hope that this reassures you and you can see that your fear is ungrounded for the most part.
4- A l'étranger ne vivant pas en état de polygamie, marié avec un ressortissant de nationalité française, à condition que la communauté de vie n'ait pas cessé depuis le mariage, que le conjoint ait conservé la nationalité française et, lorsque le mariage a été célébré à l'étranger, qu'il ait été transcrit préalablement sur les registres de l'état civil français.
COMING TO FRANCE AS AN UNMARRIED COUPLE
I am Polish but currently I am living in Australia. In July/August I am planning to move to Paris where I would have a contract job and I will be staying there for a few years. I am thinking of moving to France with my Thai girlfriend but we do not have any official documents for our relationship, as it is fairly new.
I know that I do not need a visa since Poland is a full member of EU now, but I would like to know about her rights. Is there any chance that she could get a long-stay visa in France with the option to work and that this visa could be granted because she is in a relationship with me?
Do I need to legalize this relationship somehow? Our friendship is not long enough to think about marriage but I would think about it if there were no other way.
Considering the specifics of your situation, I believe you will best achieve your goal with a two-step procedure. First you two would work on the most easily-obtained visa that makes it possible for her to enter France. Then, once in France, you would document your relationship with a " pacte civil de solidarité " (PACS, a kind of civil union), and also work to get a much better immigration status that would include the complete right to work in all capacities.
The first step is for her is to get entry-level immigration status with a " visa de long séjour mention visiteur ". There are eight types of long-stay visas that grant the right to obtain the related " carte de séjour " once in France. Most of them require a sponsor in France; only one requires no sponsor and no investment in France. Since your Thai partner has no support but you, she must rely on her own merit, or more likely your ability to sponsor her, i.e. support her financially.
There are two other types of status that might look like better alternatives. First, she could be a full-time student in France. But I believe this might not be the best choice. It has one very good feature: she would be able to work 60% of full time for one year or as long as she has an immigration title. If you need her income to live in France, this is the best solution. Yet the qualifying schools are expensive, so it might not be worth it financially. And it depends a lot on her ability to find a well-paying job in France.
The second idea is that she could start a business in France. One option is that she could work as a consultant with a visa mention profession libérale. This requires hardly any financial investment, but I am not sure she has a professional profile compatible with this plan, since she will be in a different country. She would also have to have business prospects in France who are willing to confirm their desire to use her professional services in writing so you can use their statements to request the visa. Another option is to create a company and run a business, but the required visa mention commerçant is one of the hardest to get and usually requires the creation of a French corporation, which implies significant financial investment.
Here is how to carry out the optimal plan:
Step 1: she gets entry level immigration status
A long-stay " visa mention visiteur " does not grant the right to work but you can sponsor her 100% with an affidavit of lodging and support. You will have a place to stay in Paris and your income allows this support. There are two statements to sign stating your decision to take care of her 100%, and the rest is already in your file, from your employer.
She has to prove three things:
- financial means of at least 12,000€ a year, which you provide,
- an address in France in a suitable place, also provided by you,
- a comprehensive health coverage policy, which costs about 400€ a year, purchased in Paris.
She also has to provide her personal documentation, mainly passport and birth certificate, and a police report showing she has no serious criminal record.
Step 2: once you are both in France, you create a new situation with a PACS
Once you are both French legal residents, you prepare the file needed to have a PACS registered with the relevant court, the Tribunal d'Instance. The PACS grants a hybrid status in between being married and being an undocumented couple. It confers almost all the rights and prerogatives of marriage, except for immigration purposes.
If she lives with you in France for over a year and is PACSed to an EU citizen, namely yourself, she will have the right to a " carte de séjour mention vie privée et familiale ". This card grants all rights to work, so there is no need to add another procedure.
The proof of living together is very simple to provide: everything related to the lodging and your stay in France must be in two names, as much as possible. Mail should be addressed to her, for example, as Ms. xxx C/O Mr. TTT.
This solution only works if your salary is high enough that she does not need to work the first year in France. If that is not the case, the alternative is asking for a student visa, but I would question the feasibility of this plan since her earning power may be very low in France right after she arrives. After a year or more, it should be a lot different.
Good luck with your plan.
Please forward this message to all those who would be interested in its contents. The information contained in this newsletter is intended only as general information. 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.