Filing French Taxes for 2018
AARO held its second annual French Tax Seminar on April 2. Tim Ramier, chair of the Tax Committee, welcomed the audience with some announcements of upcoming events and Pierre Taponier, a Franco-American lawyer and colleague of Tim, presented. The room was full and half the crowd was made up of first-time filers as French residents.
Although PUMa, universal health care for all, is not an income tax issue, Taponier anticipated questions about it before going on to income tax. Health care in France is a right and an obligation for everyone who lives and works in France. People who work in France contribute to the health care system by deductions from their pay, if they are salaried, or by direct payment to URSSAF if they are self-employed. For those without French income, a tax, or contribution, is levied on their worldwide income. Clarified during the Q&A, this tax was 8% on income above €10000 and is going down to 6.5% on income above €20000. For questions about PUMa, AARO's "health insurance" chair, is working with Lucien Flament, on righting the wrongs in the system. Both Tim and Pierre said they do not handle PUMa cases and recommend them to Maître Flament, who has just won the first case.
Residence is determined not just by the length of stay, but also if France is where the main residence is, most of the income, where children are in school. All residents in France must report their worldwide income to France. As citizens of the United States or Greencard holders, we must also report our worldwide income to the United States. There is a tax treaty to prevent double taxation. Citizens of the United States residing in France receive a tax credit equivalent to the French tax on their U.S. income. As clarified during the Q&A, the total income is used to determine the tax rate so the total tax paid to France may be higher than if the U.S. income were not declared, at all, but that is not double taxation.
The dates have not been published, yet. However, the past is a good indication. The new forms should be available before the end of April and the impots.gouv.fr site should open for filing by the end of April. All paper forms are generally due in mid-May, e-filing deadlines are staggered according to which department you reside in. Paris area departments are usually in the last group with a deadline at the end of the first week in June. There are no extensions.
The new forms had not come out, as of April 2. (editor's note: checking the impots.gouv.fr site, they say that all declarations must be done online this year, even for new filers, who can claim their fiscal identity number either at the local tax center or via the website by clicking "Contact" du site impots.gouv.fr > "Vous êtes un particulier" (you are an individual) > "Votre demande concerne l'accès à votre espace particulier" (you are requesting access to your private space on the site" > "Je n'ai pas de numéro fiscal" (I do not have a fiscal number).
"Si vous ne disposez pas d'un numéro fiscal, vous pouvez en solliciter l'attribution auprès de votre centre des finances publiques (service des impôts des particuliers) au guichet ou à partir d'un formulaire disponible à la rubrique "Contact" du site impots.gouv.fr > "Vous êtes un particulier" > "Votre demande concerne l'accès à votre espace particulier" > "Je n'ai pas de numéro fiscal".
"Une fois votre espace créé, vous pourrez accéder au service de la déclaration en ligne."
You can download the 2017 forms to see more clearly what you are doing and they were shown during the presentation. During Q&A, it was pointed out to check the boxes for the forms you need at the beginning. If you think you have finished filing and did not see all the forms, then go back to make sure you checked the right boxes. Also, when checking the type of income and type of tax credit for form 2047, make sure you check the boxes for "ouvrant droit à un crédit d'imôt égal au montant de l'impôt français" for your U.S. income.
Form 2042 is the main information form. It contains your name, date and place of birth, and address. Income tax in France is established per household and there are currently only three filing statuses: married, single, or PACSed (civil union). There is a page for family make-up, bank account information (obligatory -- you must have a bank account; the fisc operates by bank transfer.)
This form will contain all the income information on pages 3 and 4, much like the U.S. 1040, schedule 1 compiles the income information from all the other schedules. Foreign income is included in section 8, and the 8TK box is the one that gets you the proper tax credit, so make sure that what you declare on form 2047 in box 8TK is carried back to this form.
Foreign bank accounts, box 8UU, must be declared, as well.
Form 2047 is for foreign income. Sections 1 through 5 on the form for the different types of income: salary and or pension (section 1), interest, dividends, ... (section 2), capital gains (section 3) and how they are to be treated: taxable in France, taxable at the source with a tax credit for tax paid, or with a tax credit equal to the French tax ("OUVRANT DROIT À UN CRÉDIT D’IMPÔT ÉGAL À L’IMPÔT FRANÇAIS (MONTANT BRUT)" Be very careful to choose the latter. Section 6 is where you recap your U.S. source income for box 8TK. Section 9 is for social contributions but our U.S. income is exempt from that so do NOT enter it, there.
2044, the real estate income form for rental income, was not discussed.
3916 is the form for each foreign (non-French) account. It is the French equivalent to the U.S. FBAR requirement, with some exceptions: a separate form for each account and you do not indicate the amount in the account.
The "Année Blanche"
In 2018, residents in France paid taxes on 2017 income. In 2019, they are paying taxes on 2019 income. What happens to 2018 income?
Reporting will not change. 2018 income will be reported as in all other years. There will be an exceptional tax credit, this time only, for recurrent, non-exceptional income, such as salaries. Exceptional income, such as bonuses, will be taxed. U.S. income will be treated as it usually is, with the tax credit equivalent to French tax.
We were fortunate to be in Washington the week of a hearing on the "unintended consequences of the Foreign Account Tax Compliance Act", held by the House Committee on Oversight and Government Reform - Subcommittee on Government Operations and chaired by Congressman Mark Meadows (founder of the Freedom Caucus). Mr. Meadows has introduced a House bill calling for complete repeal of FATCA (sister bill to one filed in the Senate by Rand Paul), and four of the five witnesses were strongly in favor of that.
Doubts were raised by committee members, however, as to the likelihood of full repeal and the Chair concluded the meeting with a call for recommended ways to improve the law in the absence of full repeal. Our team formulated recommendations in line with longstanding positions of both AARO and FAWCO, had them approved by both boards and forwarded them to the committee.
- writing to your Congressperson (find him/her at www.house.gov) and advocating support for the FAWCO/AARO recommendations (either copy them into your message or attach the PDF to your message) or for the one or two of them that seems best to you.
- writing to your Congressperson in support of one of the two House bills already introduced to eliminate or improve FATCA:
- HR 2054: House bill to eliminate FATCA (Rep. Mark Meadows)
- HR 2136: House bill to exclude from FATCA reporting all accounts held in the filer's country of residence abroad (Rep. Carolyn Maloney's bill on the "Same Country Exception")
- writing to your Senator (find him/her at www.senate.gov) in support of the Senate bill to eliminate FATCA:
- S 869: Rand Paul's bill for full repeal
Overseas Americans Week - Overview
Overseas Americans Week (OAW) brings together AARO and its coalition partners each year for a five-day "door-knock" campaign in Washington to bring our issues personally to the attention of lawmakers, agencies and their staffs. Our traditional partners include American Citizens Abroad (www.americansabroad.org) and the Federation of American Women's Clubs Overseas (www.fawco.org). The first Overseas Americans Week was in May 2002.
The prime focuses over the years have remained the same, though immediate priorities change from year to year: ensuring that military and civilian overseas voters can vote using secure, efficient technology and know that their ballots will arrive in time to be counted; reducing the financial reporting burden on Americans living and working abroad; working to create an equitable tax system for overseas Americans and, more recently, to move from "citizenship based taxation" to "residence based taxation" in line with other industrialized countries around the world.
We have reacted swiftly in the face of new challenges like the creation of FATCA legislation in 2010, provisions to deny or refuse to renew passports for overseas Americans with outstanding fines or debts to the IRS, increasing numbers of financial institutions refusing service to Americans living abroad, the closing of IRS offices abroad, etc.
We promoted the creation in 2007 of the Americans Abroad Caucus. We have honored various legislators and policymakers for their work benefiting overseas Americans: Senator Jay Rockefeller and Congresswoman Carolyn Maloney (2002) for their ongoing support for the overseas community; Senators Chris Dodd and Mitch McConnell and Representatives Steny Hoyer and Bob Ney (2003) for crafting the Help America Vote Act; and United States Taxpayer Advocate Nina Olson (2014) for her support for "fair tax treatment for the global American population".
Below are a number of the "Overall Goals" supported at Overseas Americans Week over the years. Click here for the most recent (2016) position paper on overall goals.
Here’s where you’ll find the latest trending topics from AARO’s online networks. Taken from AARO’s Twitter feed and the “unofficial” AARO Facebook discussion forum, this is what’s trending among Americans overseas. *
Question from an AARO Public Forum member: “Congressman Meadows‘ office confirmed that the FATCA Repeal Bill will be re-introduced in the House when the new Congress convenes in January and that the FATCA Hearing will be scheduled when the new Congress is in session. Senator Rand Paul will re-introduce the Senate FATCA Repeal Bill at the same time. Did I miss the updates on that? Has anything been reintroduced yet?”
So far the bills, announced for January 2017, have not been introduced, but members are following the story. Read more on the public forum…
*Please note that opinions expressed on or relayed from the AARO Public Forum do not necessarily reflect the policy positions of the Association of Americans Resident Overseas. For the latest news and updates from AARO, you can also visit our official Facebook page.