Return from expatriation to France: Anticipating future issues with Tax office

[thomasparra]

I understand your advice and I thank you for it. I am solely︉ trying to understand what I could be doing wrong with the strategy of starting out︊ in France.

43k is the net income threshold, not the turnover/revenue for which the rate︋ taxer is 15%. I understand it still is low but it sounds ok for me︌ at this point given my revenue forecast. Typically as my operating margin would be around︍ 50% this gives me some room before I hit this threshold (more or less 100k︎ in revenue)

I know how the system and the people think here. As much as️ I am the first one to throw jests and hate on the social system and‌ the mentality in France, I think what you said is a bit exaggerated. I did‍ the math and it's more reasonable and cost effective for me to live in France⁠ for 1-2 years, especially as I generate less than 200k in revenue/80k in profit. If⁤ the business doesn't work, and I make no income -- I would incur a 10-15k⁣ loss by staying in France versus 40k in Dubai, just out of living + settling⁢ expenses (let alone the cost to set up a company/structure in FTZ). I am trying︀ to understand how not starting the business in France is a bad idea.

Where did︁ you get the "tax for 3 more years" after you leave? If you are referring︂ to the exit tax this is a different thing (and only applies if I stay︃ in France for at least 6 years + have made more than 800k in capital︄ gains).

 

[sriracha]

I love your attitude and I must say that is the right one to start‌ a business. Numbers are numbers and laws are clear. The law says tax is such‍ percent of that number and so I will pay X money. Cartesian I would say.⁠

However that makes an assumption- that the state is not out there trying to get⁤ you - in other words, that the state is the state and it does not⁣ cheat - which is false, for entrepreneurs, in France.

As stated in my previous post,⁢ France is DESPERATE for money to maintain social peace (current events are showing that) and︀ the only people who don’t set things afire when their rights are trampled are entrepreneurs,︁ so the government takes money from them by playing dirty. People know that but you︂ got the money by stealing, remember? So when you go to the brassserie and complain︃ with your friends about the crazy Fisc, you will be confronted with a wall of︄ “if you pay that much tax it means that you have money” faces.

How do︅ you play dirty when you are the government?
- you change or amend the tax︆ laws every year. When you read French tax laws, they are full of dates, sub-sub-sub︇ categories of application, they grow by accretion.
- a simple law becomes a 1000 page︈ law so you will either not take advantage of it or make a mistake
- for laws that don’t change, you change percentages, thresholds and application dates so companies will︉ inevitably have to pay more
- you add 1% laws every year for “the environment︊ “, “solidarity with X”, “reconstruction of wooden shacks in the Pyrenees” etc and they never︋ go away

And most importantly, you play on the actual application of otherwise fair laws.︌ It’s not the same things to owe 12 euros by December 31st as owing one︍ euro every month at the end of the month, or to send a letter saying︎ pay immediately 12 euros because you didn’t pay last year when you know it’s false,️ or to send a letter asking you to prove how that deduction you took last‌ year is actually applicable when you have already proved it is. To make this s**t‍ fly, they make sure that the employees at your local offices are hard core SJWs,⁠ especially in recent times they are hiring from the lowest rungs of society so that⁤ they plainly hate you and your money. Please stand in line at your local tax⁣ office and see who’s manning the offices, see how entrepreneurs are treated.

About those 3⁢ years…ask around “combien de temps il faut pour fermer une SASU ».

I think you︀ will open your SASU anyway, but at least you will know what’s happening to you︁ in real time.

 

[thomasparra]

sriracha said:
I love your attitude and I must say that is the right one to start a business. Numbers are numbers and laws are clear. The law says tax is such percent of that number and so I will pay X money. Cartesian I would say.

However that makes an assumption- that the state is not out there trying to get you - in other words, that the state is the state and it does not cheat - which is false, for entrepreneurs, in France.

As stated in my previous post, France is DESPERATE for money to maintain social peace (current events are showing that) and the only people who don't set things afire when their rights are trampled are entrepreneurs, so the government takes money from them by playing dirty. People know that but you got the money by stealing, remember? So when you go to the brassserie and complain with your friends about the crazy Fisc, you will be confronted with a wall of “if you pay that much tax it means that you have money” faces.

How do you play dirty when you are the government?
- you change or amend the tax laws every year. When you read French tax laws, they are full of dates, sub-sub-sub categories of application, they grow by accretion.
- a simple law becomes a 1000 page law so you will either not take advantage of it or make a mistake
- for laws that don't change, you change percentages, thresholds and application dates so companies will inevitably have to pay more
- you add 1% laws every year for “the environment “, “solidarity with X”, “reconstruction of wooden shacks in the Pyrenees” etc and they never go away


And most importantly, you play on the actual application of otherwise fair laws. It's not the same things to owe 12 euros by December 31st as owing one euro every month at the end of the month, or to send a letter saying pay immediately 12 euros because you didn't pay last year when you know it's false, or to send a letter asking you to prove how that deduction you took last year is actually applicable when you have already proved it is. To make this s**t fly, they make sure that the employees at your local offices are hard core SJWs, especially in recent times they are hiring from the lowest rungs of society so that they plainly hate you and your money. Please stand in line at your local tax office and see who's manning the offices, see how entrepreneurs are treated.

About those 3 years”¦ask around “combien de temps il faut pour fermer une SASU ».

I think you will open your SASU anyway, but at least you will know what's happening to you in real time.
Click to expand...

I know it's fucked up, but what other/better option do I have to be honest?

 

[thomasparra]

I know it's fucked up, but what︁ other/better option do I have to be honest?

 

[sriracha]

I think a lot depends on your priorities- living in France, being an entrepreneur, investing…probably‌ there is a good country for each of these.

Maybe a good option would be‍ an auto entrepreneur AND staying within the low-formality threshold (I think it’s 60k/year and when⁠ you really take off, you get one more year of low taxes. Almost no papers⁤ to file, no accountant needed, low (for France) tax.

At that point you can decide⁣ what is really important to you, without having the government put a ball and chain⁢ to your foot.

If you go that route, I advise that you DON’T get an︀ accountant. You don’t have to get one (as opposed to the SASU) and most of︁ them are useless leeches anyway (personal experience with 3 Parisian accountants, also 2 of them︂ forgot to file 2 times in a row).

Closing down an auto entrepreneur is also︃ quick and painless.

 

[Marzio]

Wise words, if for some inexplicable reason i would want to start a‌ business in France i would follow this advice and stay below the radar.

 

[TheCryptoAnt]

None G like if you gonna be there 2 years‍ tops just dont declare s**t, dont say s**t, dont know s**t I no hablo french⁠ cause the amount of bs you are gonna have to deal with is of biblical⁤ proportions.

chances of they knowing what u up to are very slim if you keep⁣ it low, and even if they do, Id rather pay some fines than having to⁢ deal with the French IRS.

 

[sriracha]

I think he's from France, he cannot run the risk⁢ of not being able to go back to his country ever again.

 

[TheCryptoAnt]

dont even tell‍ them u there, use Airbnb or some platform like them.
i say this cause he⁠ said 2 years tops, if he plans on actually relocating there then my answer can't⁤ be used

 

[Untangle]

When you come back to France you are immediately considered a tax resident on⁣ your date of arrival. Middle if the year, end of year it does not matter.⁢ You have to register yourself with local tax office when you do so.

All your︀ foreign bank accounts are already known by french tax office, even if you are not︁ resident. French passport holders are reported worldwide by banks to french authorities at opening and︂ once a year, with balance and interests earned.

You must declare all accounts, even those︃ closed within the last 12 months.

Auto entrepreneur is the way to go for 2︄ years then close it after that if you managed to reach the max revenue amount.︅
This is the cheapest way to maximise your profit. Cheap tax.
Even foreigners use this︆ and become resident for 2 years in France then close it, declare it and wire︇ it back to their home country (Belgium etc) and legally leave France after that.

 

[mud]

Also being resident in France the past 4 years I've had some look at the‌ tax system.

It might be worth exploring if France and HK have a double tax‍ treaty which means you would NOT be counted as a French taxpayer. Also, you should⁠ look at the number of days you're in France to see if you get caught⁤ or not under the time rules.

(We are shutting down our French company and spend⁣ most of the year out of France to avoid these, and other issues)

I can⁢ say I was staggered at the price of accountants, lawyers, and tax agents in France.︀ It is many times higher than other western countries.

We made the mistake of employing︁ someone in our French company. 14 Agencies and 3 months later we had to sack︂ the young fellow unfortunately. The friggin French Tax Office even fined us €1800 for not︃ lodging a €0 payroll declaration for the first 4 days we employed this fellow. (They caved after I cracked the shits and told them I couldn't lodge the form -︄ with its 145 lines of info - unless they actually delivered to me a log︅ on to their portal)

 

[thomasparra]

Untangle said:
When you come back to France you are immediately considered a tax resident on your date of arrival. Middle if the year, end of year it does not matter. You have to register yourself with local tax office when you do so.

All your foreign bank accounts are already known by french tax office, even if you are not resident. French passport holders are reported worldwide by banks to french authorities at opening and once a year, with balance and interests earned.

You must declare all accounts, even those closed within the last 12 months.

Auto entrepreneur is the way to go for 2 years then close it after that if you managed to reach the max revenue amount.
This is the cheapest way to maximise your profit. Cheap tax.
Even foreigners use this and become resident for 2 years in France then close it, declare it and wire it back to their home country (Belgium etc) and legally leave France after that.
Click to expand...

Outside of FACTA, international banks are not required to report such information to the country of citizenship of their clients.

CRS: "Under the CRS, financial institutions are required to identify customers who appear to be tax resident outside of the country/jurisdiction where they hold their accounts and products, and report certain information to our local tax authority. They may then share that information with the tax authority where you are tax resident."

If a client (UK or French citizen for example) lives and is a tax resident in HK, and that his status with the bank is HK Resident, no information will be shared outside of HK. This is how I understand it. However, if the client declares his UK or French tax residency then the bank should report the information.

Auto entrepreneur is a good status if you manufacture or resell physical goods or if you provide services with little to no costs (cleaner, consulting, uber driver). At the moment you sell services with costs that represent more than 15-20% of your revenue the status becomes a burden as your tax/cotisations sociales are based on revenue and not the operating income.

 

[thomasparra]

Outside of FACTA, international banks are not required to report such information︄ to the country of citizenship of their clients.

CRS: "Under the CRS, financial institutions are︅ required to identify customers who appear to be tax resident outside of the country/jurisdiction where︆ they hold their accounts and products, and report certain information to our local tax authority.︇ They may then share that information with the tax authority where you are tax resident."︈

If a client (UK or French citizen for example) lives and is a tax resident︉ in HK, and that his status with the bank is HK Resident, no information will︊ be shared outside of HK. This is how I understand it. However, if the client︋ declares his UK or French tax residency then the bank should report the information.

Auto entrepreneur is a good status if you manufacture or resell physical goods or if you︌ provide services with little to no costs (cleaner, consulting, uber driver). At the moment you︍ sell services with costs that represent more than 15-20% of your revenue the status becomes︎ a burden as your tax/cotisations sociales are based on revenue and not the operating income.️