Filling in a French Tax Form
Does everyone who owns a French home need to complete French tax forms?
The good news is that if you own a property in France which you only use for your holidays you do not need to tackle the completion of the complicated French income tax form but anyone resident in France must complete the annual French tax (Impôt sur le Revenu) form. Anyone moving to France will, at the start of the first year in France, need to complete a FORM 85 from HMRC to allow the U.K. tax authorities to refund any overpayment of tax and don’t forget to get your FORM S1 if you are retiring to France as this will exempt you from payment of social charges on any pensions or other income. When you visit your French tax office (Centre d’impôts) on your arrival in France you will need to sign a FORM FD5 which the French tax authorities will use to confirm to HMRC that you are now tax resident in France.
How is your place of residence determined?
How is residency determined if you own a property in France and one or more elsewhere in the world? You will be considered fiscally resident if:
- You have your main home in France; to determine main home it is considered that wherever you spend 180 or more days in a year is your main home.
- You carry on a professional activity in France, either self-employed or as an employee;
- Your centre of economic interests is in France, e.g. investments, business.
If you are not tax resident in France you will still need to complete a French tax form if you receive any income in France or from any income producing activity which takes place in France. For most owners of French property this will be income derived from the letting of that property to holidaymakers or to the local market.
How to complete a French tax form
It is a little erroneous to talk about a French tax form as, in fact, you are likely to be asked to complete several forms finally consolidating the information contained on each form on the main FORM 2042. Forms exist for every type of income but the ones most likely to be needed on a regular basis by most ex.pats are
FORM 2042C for micro entrepreneurs
FORM 2042 for furnished property rental income
FORM 2047 for income received from abroad. When completing this form you must convert foreign currency into euros at the exchange rate on the day you received the income, keeping a note from your bank or other body which transferred the money into your account.
If this is already sounding too confusing the good news is that if you take a statement of your income, together with all relevant documentation, to your local tax office they will be able to help you to complete the required forms. (You should expect to have to make an appointment).
Currently you have a choice of submitting paper or online forms but plans are underway to accept only online submissions in the very near service. In 2018 completed paper tax forms, related to income received in 2017, must be received by the tax office no later than the 17th May 2018. For online submissions the dates vary according to the department you live in….Depts 1-19 23rd May, Depts 20-49 30th May, Depts 50 onwards 6th June 2018.
Now for the good news
As from 2018 the tax collection system is changing. In the past, once you submitted your tax form you will have received an Avis d’imposition in late summer informing you of the tax due. Anyone currently in the French tax system will have been paying the taxes due in either three parts during the year or in 10 monthly instalments. Recent change in tax laws have brought France in line with most of the rest of the world meaning that tax will now be taken as PAYE for employees or in monthly instalments (for those with unearned income, rental income or self employed income) where the amount will be based on the previous year’s income with a top up or refund issued when the following year’s tax form is assessed. To allow for this changeover all French tax payers will have no tax to pay on income received in 2017. Unfortunately, if you are reading about this for the first time it probably won’t apply to you as your registration for Frech tax will be too late!