Too Old to Rock ‘n’ Roll: Too Young to Die!

September 2019

 

BACK TO SCHOOL – BACK TO WORK
In France, la rentrée, which generally coincides with the beginning of the school year, is not just for students; France also goes back to work. I hope that you all had a nice summer. I am writing this issue as France is going through one of several heatwaves. Some of them have broken heat records. My office naturally stays cooler than the outside temperature even at the worst time of the day.

France used to be completely asleep during the entire month of August. This was called the “Sleeping Beauty syndrome.” Although long-term residents of France notice each year that it is increasingly “business as usual” on August 1, a nonchalant ambience still reigns in Paris in August.

I remember as a small child watching my dad close up his shop, just as we closed up the house for vacation. Even though there were not many employees in his carpentry shop, for me the closing symbolized what was happening to businesses everywhere in the country. In the decades after 1936, the year the law requiring paid vacation was passed, the tradition of closing everything the first day of August was the norm, and France, except in tourist areas, “went to sleep.” My current office has the same kind of roller shutter as many shops, and I often think of those days when I walked around my dad's woodworking shop. As I often state, I rely more on my ability to craft than coming up with a genius idea on the spur of the moment.

Today, the French are legally entitled to five weeks of paid vacation, which is enough to go away at least twice a year, and long enough that you feel disconnected from the office.

I TURNED 60
Yes, I turned 60 on a road trip that took my wife and me to a remote countryside village in Tuscany, Italy. We stopped several places where the norm was 1,000-year-old buildings and cities. To top this off, our final stop was Alesia, which is about a two-hour drive from Paris.

This is what Wikipedia says about it:
“The Battle of Alesia or Siege of Alesia was a military engagement in the Gallic Wars that took place in September, 52 BC, around the Gallic oppidum (fortified settlement) of Alesia, a major center of the Mandubii tribe. It was fought by the army of Julius Caesar against a confederation of Gallic tribes united under the leadership of Vercingetorix of the Arveni (the territory is today the départements of Puy-de-Dôme and Cantal.)

“It was the last major engagement between the Gauls and Romans, and is considered one of Caesar's greatest military achievements and a classic example of siege warfare. The battle of Alesia marked the end of Gallic independence in France and Belgium.”

As a history lover and Christian, it moves me to know I am walking around looking at ruins that date roughly from the time of Christ. My wife learned how to pronounce Vercingetorix as we looked at his statue overlooking the nearby village.

I rarely reminisce, spending most of my time dealing with today’s affairs and planning my future when I can. But when I turned 40 and then 50, these were landmark times for me, life-changing moments. My 60th birthday was no different. For several months I have reflected on the fact that I cannot continue with my current workload, even though I still feel fit and see few physical reasons to slow down. Toying with these thoughts made me wonder: How old does one need to be before one feels the need to slow down?

That is where the title of this issue comes from. The last verse hits home for me:
“No, you're never too old to rock 'n' roll
If you're too young to die
No, you're never too old to rock 'n' roll
But he was too young to die.”

I see myself continuing my work and my ministries for ten years or more, God willing.

MUSIC OF MY YOUTH
I find the album Too Old to Rock ‘n’ Roll: Too Young to Die! the most underrated by Jethro Tull, which is itself a very underrated band. In 2001 I joined the English Toastmasters chapter in Paris. Our first speech was to introduce ourselves. I did not follow the usual format but wrote various sections based on the Impressionist painting technique, i.e. splashes of color mingling together which at the end make a piece of art. I titled each section with the name of an album by this band:
Living in the Past
Stand up
Burst Out
Songs from the Woods
Too Old to Rock ‘n’ Roll: Too Young to Die!
Minstrels in the Gallery
Aqualung

Like many people, I discovered this band listening to Aqualung when I was 16.

From Wikipedia:
“Too Old to Rock 'n' Roll: Too Young to Die! is the ninth studio album released by the British band Jethro Tull, recorded in December 1975 and released in 1976. … [It] is the last Jethro Tull concept album, and follows the story of Ray Lomas, an aging rocker who finds fame with the changes in musical trends.”

I love Lomas’ ability to distance himself and project himself decades into the future when his career is over and he is getting ready to be put out to pasture. At the same time, the orchestration and lyrics blend really well, as is so often the case with this band. The albums Thick as a Brick and Living in the Past are also exceptional in that regard. Writing this issue made me realize that I own most of the concept albums of that time; nearly all the major bands of the time made at least one.

I remind my readers that Paul McCartney was born on June 18, 1942, Mike Jagger on July 26, 1943, Roger Daltrey on March 1, 1944, and Elton John on March 25, 1947. Who would have guessed that they would still be playing, enjoying worldwide fame at the age of being grandfathers! There must be a special place for Keith Richards, born on December 18, 1943; the very fact that he is still alive is a mystery to many.

A TREASURE HUNT IS GOING ON IN PARIS!
I heard this comment recently on French national TV, and even though it is 100% false, the gigantic repairs and renovations occurring right now do give the impression that every single block in the city is undergoing massive construction.

There are three very different reasons why this is happening.

First, there is normal maintenance, which does not require much explanation. Then there is a policy that was introduced after the previous mayor, Bertrand Delanoë, was elected on March 18, 2001 – that of discouraging cars and trucks from driving within the city limits. The current mayor, Anne Hidalgo, elected on April 5, 2014, has followed the same policy. It has been said that she is even stricter regarding this goal. So all over the city, areas open to cars are shrinking, with streets losing one or even two lanes, while new bus and bicycle lanes are being created and old ones are being enlarged. Sidewalks are being widened and new-model newsstands are being installed. Of course, this work means narrowing and sometimes closing many streets, totally disrupting traffic.

Third, the gas and electricity companies sometimes need to do maintenance and dig holes, but this is marginal compared to what the Compagnie Parisienne de Chauffage Urbain (CPCU) is doing.

From Wikipedia:
CPCU “is a semi-public company, a subsidiary of the Engie group (66% owned by Engie and 33% by the City of Paris), responsible for district heating, mainly by means of a water vapor network, in Paris and in several surrounding communes (Aubervilliers, Boulogne-Billancourt, Charenton-le-Pont, Choisy-le-Roi, Clichy, Gennevilliers, Gentilly, L'Île-Saint-Denis, Issy-les-Moulineaux, Ivry-sur-Seine, Le Kremlin-Bicêtre, Levallois-Perret, Saint-Denis, Saint-Ouen and Vitry-sur-Seine).”

District heating, also known as city heating, transports and distributes steam to a network nearly 480 km long, which heats many buildings in these municipalities. The infrastructure had not been adequately maintained for a long time, and in recent years more and more buildings terminated their contracts and chose a different way to get hot water. To deal with the competition from the electric and gas companies, the CPCU decided to undertake massive renovation and offer a more competitive service. Where this is the case, there is always a small poster stating that the CPCU is managing the construction site.

Despite the goofy “treasure hunt” statement and drivers’ exasperation, several important issues are being addressed here. Since the CPCU is partly owned by the city of Paris, it has been said that the intent is to create the maximum chaos possible on all fronts. In truth, Parisian officials believe fossil fuel use should be a thing of the past and they want to invest in public transport, including electric cars and buses, and develop other non-polluting forms of transport. The vast majority of the inhabitants and governments in most developed countries are of the same opinion, and they are implementing policies intended to phase out the use of fossil fuel.

In the USA, very few cities are more than 400 years old. In Europe, a significant share of the population lives in buildings as old as, say, Williamsburg, Virginia. Many European cities were built before cars and electricity were invented. When it came time to modernize them, the common-sense reflex was to make the oldest neighborhoods, most of them 500 years old and older, into pedestrian zones. Streets in these areas were often too narrow for even one car. At the other end of the spectrum, Paris worked for decades, from the 1960s to the 1990s, to make car traffic more fluid, to the detriment of pedestrians. On the other hand, northern European cities protected their ancient downtowns from very early on. Some cities charge stiff fees to drive inside the city center, which deters many. France, especially Paris, has never had the political will to impose such a system or to set apart large sections of the city for pedestrians. Arrondissements 1 to 4, which were the city limits before Baron Haussmann started reshaping the city in the mid-19th century, could have been pedestrianized, considering how old they are.

To illustrate my point, Henry IV (1553–1610) drained a swamp just outside the city limits of the time, which was called the marais in French. Now the famous neighborhood still known as the Marais has some of the city’s oldest privately-owned buildings, and people still live in them.

The Pont Neuf, which means “the new bridge,” is the oldest bridge in the city. Henry IV wanted it built so that Paris would grow on the other side of the river towards the Louvre.

To conclude this comparison, the city of Williamsburg was founded as the capital of the Virginia Colony in 1699, nearly a century after the Pont Neuf was finished.

Regarding the way current Parisian leaders are handling the construction, should we criticize them for the inconvenience and apparent lack of coherence, or should we support them for their goal and look beyond the honking and moaning? The prize in the infamous treasure hunt could be better air to breathe and a quieter, more peaceful city, without making it a museum for tourists like Colonial Williamsburg.

For more information, see www.paris.fr/chantiers.

THE LINK BETWEEN THE FRENCH INCOME DECLARATION, THE TAXE D’HABITATION AND RENTAL INCOME TAXATION
France’s income tax declaration requires information about your primary residence: you must state whether you are the owner, a tenant or a guest. There is also a section to be filled out if you moved during the previous or current year. The fact that half the front page is dedicated to the address shows how important this matter is to the tax office. Among other things, it enables tax officials to levy an appropriate taxe d’habitation (lodging tax) as well as the TV license fee, the redevance audiovisuelle, in the autumn. A consequence often forgotten by renters is that filing an income declaration in France triggers the imposition of the taxe d’habitation and also the taxation of the rental income the landlord receives.

There are so many dubious unwritten leases, subleases, cash rental arrangements and so on in Paris, and probably other major French cities, that many renters get into serious trouble with their landlord over having declared their income. This aspect of things is always overlooked unless a professional identifies the problem. It should not prevent people from doing the right thing, but it helps them get ready for the attack, which often occurs after the landlord receives a notice to pay taxes on undeclared rental income, along with the associated fines and other penalties. One way of knowing where you stand is whether you paid the taxe d’habitation before you declared income for the first time. If you did, then there is no danger. If you did not, and you have lived in your current place for a couple of years or more, this is a sign that your landlord is paying this tax and hopes the tax office will ignore the fact that he has a tenant there.

MY COLUMN AND MY READERSHIP
My business listing of subscribers exceeded 3,000 members this summer. This is an achievement, even though many would consider this number tiny compared to most blogs targeting the expatriate community in France. Stephen Heiner is my adviser on those topics, and also a good friend. He looked at some of the data related to my column. The average ratio of openings is 86% over the last five months and continues to grow after one month. He says that these two situations set my readership apart, and he cites several reasons:

  • I have never used a list of which I was not a member.
  • I have had a personal exchange with every single person who is on my subscriber list.
  • The list has never been used for any promotions and has never been sold to anyone, and no one but my webmaster and I have even had access to it.
  • As I have been in business for over 20 years now (since 1997), many of the readers have been my clients.

The most common referral I now get is someone who knows one of my readers and either was told I would be able to help or received an issue of my column dealing exactly with the problem they are having. Since I seldom give courses and conferences anymore, I rely on my readership, which I have long assumed was made up of past and current clients. Now I know that this impression was right, judging by the information my publishing software gave me.

As of August 30th, the entire list has 3,435 email addresses, and the business one has 3,058.

For those interested in specific numbers:

  • July 2019 – sent = 2.990 – received = 2.977 opened = 2.196 unsubscribed = 4 – 74%
  • June 2019 – sent = 2.946 – received = 2.941 opened = 2.466 unsubscribed = 4 – 84%
  • May 2019 – sent = 2.918 – received = 2.910 opened = 2.546 unsubscribed = 8 – 88%
  • April 2019 – sent = 2.886 – received = 2.880 opened = 2.704 unsubscribed = 11 – 94%
  • March 2019 – sent = 2.844 – received = 2.838 opened = 2.474 unsubscribed = 4 – 87%.

I am honored, and I thank every single reader from the bottom of my heart. I look at the numbers and I feel humbled by this faithfulness. Thank you again.

MY FEES WILL GO UP ON OCTOBER 1st 2019
I plan to change some aspects of my business when I reopen the office on Monday, August 19th. The main reason is to allow my assistant to do some tasks more systematically. One of them is to accompany the clients to the prefecture, URSSAF, CPAM and other public offices. She already handles most of the dealings with the offices where self-employed people are registered. She has also accompanied my clients to the prefecture several times. As her fees are lower than mine, this should compensate for the increase in my fees. On October 1st, I will raise my initial retainer from 270€ to 300€ and the hourly rate from 110€ to 130€.

Best regards,

WIRING MONEY FROM THE USA TO FRANCE

QUESTION

I arrived a few months ago in France and settled in the countryside near Cahors. I had no problem opening a bank account by showing my American passport and my OFII identification. I heard that there is legislation called TRACFIN that regulates international wiring of money. Would the issue come up if I were going to transfer money from my American to my French bank? Does this come up if I leave that money in my US account and transfer small amounts over time? I need to bring money to France, as I am not allowed to work here.

UP

ANSWER

I believe you have misunderstood the legislation, and what you plan on doing could do you a lot of harm. Let’s review what is at stake in that order:

  • 1 – What does the law state and how is it enforced?
  • 2 – What French banking documents does the prefecture demands?
  • 3 – Is there a French equivalent of FBAR?

From Wikipedia:
“Tracfin (Traitement du renseignement et action contre les circuits financiers clandestins) is a service of the French Ministry of Finances. This office fights money laundering. Tracfin is a unit of French Ministry for Economy, Finance and Industry and the Ministry for the Budget, Public Accounts, the Civil Service and State Reform with a statewide reach. Since its creation in 1990, employees have worked to identify and prevent or prosecute illegal financial operations, money laundering and terrorism financing.”

The law created a team of inspectors and the guidelines with which banks and financial institutions must comply. Always keep in mind that in France, a bank branch manager is personally criminally liable for money laundering and terrorism financing in his/her branch. One caustic criticism often heard about French banking is that opening an account is worse than an FBI interrogation. I believe this is a gross exaggeration but the reason for such suspicion is clear.

One tool used by the Banque de France and Tracfin inspectors is les états Banque de France. My explanation needs to be somewhat technical so my reader will be able to whether they are affected by this law.

All French banks report on a special document to the Banque de France about wire transfers coming in and going out of France. Small amounts are aggregated in a lump sum, but all international debit or credit transfers of at least 10,000€ are singled out on the reports. This means that in theory the banker can be called to explain what every such transaction is about. Therefore, your banker should, in theory, ask for documentation of all your wire transfers of 10,000€ or more. The reality, of course, is very different. Your banker quickly learns how you handle your money, including how often you wire money to France. He knows your “normal” amount for an individual wire and will only question you when an amount is truly out of the norm for you. Here are two very different examples.

1 – It is fine if you spend 4,000€ a month and receive the same amount in one or more wires from the US to cover your spending. But a 40,000€ wire would need to be documented, as it is out of your norm.

2 – It is fine if you spend 4,000€ a month and you wire about 24,000€ twice a year from the US to cover your spending. Here a 40,000€ wire might not look truly unusual but one for 200,000€ would need to be documented, as it is out of your norm.

Thus, 10 wires over 10 months of 9,500€ each that are not offset by equivalent spending will quickly catch the manager’s attention. He/she will immediately suspect fraud, report to Tracfin and summon you to the office. At that point, since the manager’s job could be on the line, your account will be closed in 30 days. It would be safer to wire 100,000€ at once from your personal US bank account and submit the documentation even before the money reaches the branch.

Reminder, as a French resident you MUST declare your American bank accounts to the French tax office. There is not the same as what is required for FBAR, you need only to provide the account number and the name and address of the branch. Like most French and American people alike, you may resent filling out this form. To raise your spirits when you get to it, remember that it can save you hours of headaches and smooth your relationship with your banker, which is important at a time when many accounts held by Americans are being closed by French banks.

 

UP

FRENCH TAXATION OF FRENCH AND AMERICAN INCOME

QUESTION

I have been working in France and have paid my French taxes dutifully. I also paid taxes in the US on American income. For immigration reasons, I must show my French income tax statement, showing my global worldwide income for the last three years. Since they became aware of all of my revenue, I now owe them an additional 2,618€ for the 2016 and 2017 tax years. I was shocked and very upset, as I didn’t budget to pay this sum and when I declared my US revenue, I didn’t think this action would affect my tax situation in France. Does this seem right to you? Is there anything that I can do to not have to pay this huge sum for these years?

UP

ANSWER

The issue you have raised must be addressed in two very different ways. Both countries tax worldwide income and each uses the taxes paid in the other country to offset non-taxable foreign income, in compliance with the Franco-American tax treaty. So, if you have indeed declared your French income to France and your American income to the IRS, you have already paid the related income tax on the respective incomes you have.

I assume that you got stuck at the prefecture while renewing your immigration status. The reason must have been that you did not show sufficient income on the current French income tax documents. Most likely you showed the avis d’imposition sur les revenus. During that meeting, the prefecture understood that you also have American income which you declare there. You were then advised to find a way to improve your earnings, in order to maintain your carte de séjour. You thought that since this American income had already been taxed, it would not have any financial consequences.

The French tax office allows you to change your declarations, probably going back three years as the statute of limitations allows. Looking at the years you mention, I assume you have been holding a carte de séjour valid for several years, which means you revised your declarations for all the years it was possible. The prefecture mechanically reviews this kind of file. Each calendar year must show net income at least equal to French minimum wage (for 2018 the net taxable SMIC was 14,253.96€).

What happened is that adding the American income to the French calculation must have changed the marginal tax bracket for those years. This is where the extra money you now owe comes from. But to put this issue in perspective, while I fully respect that an additional 2,618 euros is probably a large amount for you to pay, the alternative would most likely have been losing your French immigration rights. I tend to think that keeping them is worth this amount. Last but not least, the French tax office is pretty open to agreements on scheduled payments. I am sure that if this is a real hardship for you, you should be able to get it spread out in six monthly installments. That should make the entire situation seem a lot more reasonable.

UP

THE OTHER WAY TO GET A CARTE DE SEJOUR IN THE COUNTRYSIDE

QUESTION

I read with interest your May 19 Q&A column, in particular, your comments regarding becoming a “tax resident” of France after 183 days. Being Australian, we resided in Dept 86, the Vienne, from 2008 until 2013, having visiteur cartes de séjour.As you described, we had to provide evidence of home-ownership which was not a problem as we had purchased a fermette in 2000. Other documentation demonstrating financial security, health insurance, etc. was also required. Our visiteur status meant we had to appear at the Prefecture de la Vienne each year for renewal of our cartes de séjour. Mind you, by the time they arrived in La Poste, it was time to commence the whole proceeding again! Thank you for your column, which I find very interesting even though I do not live in France at present. And BTW, a very happy 60th!

UP

ANSWER

I am sure many readers will be completely amazed that your carte de séjour was sent in the mail when so many are faced with at least two appointments at the prefecture. Sometimes there is such a long line to pick up the plastic card that they wish they were sitting in the waiting room as they did at the initial appointment, forgetting how anguished they were while waiting to be called to submit the file. In Paris, I have seen such a long line that I would not be surprised if there were people who waited three hours before walking out with the card.

I cannot easily check this kind of thing, but I can state with reasonable confidence that no prefecture now sends the carte de séjour in the mail. The entire procedure has been scrutinized and secured so much over the entire French territory that I cannot conceive of this still being possible.

It is also true that all prefectures are finding innovative ways to limit the number of people entering their premises. Some ask for the initial file to be sent by registered mail, then if the file is complete they make an appointment to check the originals, making sure the foreigner is not cheating by tampering with the documents. I recently mentioned that many prefectures book appointments exclusively through their website so that the foreigner does not go to the office asking for one.

Some small prefectures in the less populated parts of France delegate to the town hall the task of reviewing files asking to renew a carte de séjour. The prefecture then receives and reviews the file again and hopefully approves. Eventually, it sends the plastic card to the town hall and the foreigner is notified to pick it up.

According to what I am hearing about this procedure, most of the time the mayor conducts the meeting. They usually know the foreigner well, since they are neighbors. Also, most of the time there is only one foreigner, who is known by everybody in the village. The procedure becomes informal, for example, the applicant might be asked if he/she can drop off the file the next morning. Picking up the card ends up equally casual.

Remember, there are 34,839 communes in France, which each have a mayor. There has been an ongoing effort to reduce this number so that each commune is big enough to be a true administrative center with a professional staff doing the needed work.

UP

DISCLAIMER

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.

UP

14 Shares

Leave a Reply

Your email address will not be published.