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Old 07-16-2014, 07:44 PM
 
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[SIZE=3]We are thinking of moving to Paris for one year (furnished apartment, while keeping home here in the US) in a couple of years. Husbandwill by then be retired. I would like to find out if I can continue to work fromParis remotely as a principal for my own US-based translation company. Are there any tax implications I should be aware of? I hold boththe German and the US citizenship. I would think it does not matter from whereI work, as long as I continue to file my US taxes. Thanks![/SIZE]
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Old 07-16-2014, 09:17 PM
 
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I would think that you would be subject to paying personal income tax in France. It doesn't matter where your citizenship is, it matters where your business income is generated. You would be soliciting work, and doing the work, and receiving payment in France I presume?

If your books and records, mailing address, bank account, etc. are in France for the greater part of a year, then you would probably pay French income tax for that year, because your professional activity would be in France during that time, and the income would be considered paid to you in France. You would need to report your income and file a French income tax return.

This is all subject to the tax treaties between the U.S. and France; the fact that the business is based in the U.S. might affect how the business income is reported and taxed (to the U.S. or France? Or both?)... but I'm pretty sure your personal income tax would be paid to France for that year that you reside there.

I strongly suggest checking with both IRS and the relevant French ministry of finance before you move and transition your business activities to a new location... You have plenty of time to check into it.
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Old 07-17-2014, 11:01 AM
 
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Thank you so much! The thing is that all my clients would continue to pay via wire into our US bank account. You're right, I better check with the IRS. Heard discouraging things about French bureaucracy but might as well tackle it.
Thanks again!
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Old 07-17-2014, 01:06 PM
 
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If you are only going for a year I wouldn't worry too much and enjoy the visit. You would become a tax resident in France around day 185 I think it is. but given it's for only 1 year it's a lot of paperwork and hassle to be honest.

Most people I know who did a year abroad still considered it a holiday and had their main home still in the USA and filed their normal US taxes
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Old 07-18-2014, 02:13 PM
 
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I like that approach a whole lot more! Thank you!!
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Old 07-18-2014, 02:49 PM
 
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Quote:
Originally Posted by SabinaH View Post
I like that approach a whole lot more! Thank you!!

You'd not be able to file until quite a while into your trip. By the time you file and get your paperwork sorted you'd be back in the USA.

If you use the medical system in France the cost is quite low compared to the USA. You may get your insurance in the USA to cover but barring a major medical emergency the day to day stuff is quite low.

You will be paying VAT and local costs are included in the rent anyway. You won't be taking anything from the government or economy since you have your current job.

Just how I see it. Maybe someone would follow the letter of the law, do lots of paperwork and it be even in the end anyway, I can't see it worth the hassle
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Old 07-18-2014, 04:36 PM
 
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Originally Posted by BritinUSA View Post
You'd not be able to file until quite a while into your trip. By the time you file and get your paperwork sorted you'd be back in the USA.

If you use the medical system in France the cost is quite low compared to the USA. You may get your insurance in the USA to cover but barring a major medical emergency the day to day stuff is quite low.

You will be paying VAT and local costs are included in the rent anyway. You won't be taking anything from the government or economy since you have your current job.

Just how I see it. Maybe someone would follow the letter of the law, do lots of paperwork and it be even in the end anyway, I can't see it worth the hassle
The main reason that I see it as being worth the while to follow the letter of the law: FATCA. Foreign banks are now obligated to share their information on U.S. citizens with the IRS. The IRS now knows if you've been bad or good... kinda like Santa Claus, except with law enforcement powers.

I did a little more reading online on this topic, and it turns out that the U.S. is one of two countries in the world (the other being Eritrea) that compels its citizens to file a yearly tax return, no matter where they are residing. So the OP could very well reside in France for a year or more, and have to file tax returns for both the U.S. and France. The way the U.S. handles the double taxation problem is to provide tax credits for the income reported to the French authorities. So the OP would in this way report the income to France on a French tax return, pay the tax to France, and the file a tax return to the U.S. authorities while claiming the foreign tax credit for the French income that was already taxed by France.

Yes, it's complicated. The best advice I can think of would be for the OP to find a French tax accountant who speaks English, and who is familiar with the U.S. tax system. And talk to the French and U.S. authorities. All financial information is kept computerized nowadays, and as such it is traceable. It's worth the while to make sure everything is reported correctly according to the letter of the law.
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Old 07-18-2014, 04:50 PM
 
418 posts, read 398,542 times
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Quote:
Originally Posted by Ottawa2011 View Post
The main reason that I see it as being worth the while to follow the letter of the law: FATCA. Foreign banks are now obligated to share their information on U.S. citizens with the IRS. The IRS now knows if you've been bad or good... kinda like Santa Claus, except with law enforcement powers.

I did a little more reading online on this topic, and it turns out that the U.S. is one of two countries in the world (the other being Eritrea) that compels its citizens to file a yearly tax return, no matter where they are residing. So the OP could very well reside in France for a year or more, and have to file tax returns for both the U.S. and France. The way the U.S. handles the double taxation problem is to provide tax credits for the income reported to the French authorities. So the OP would in this way report the income to France on a French tax return, pay the tax to France, and the file a tax return to the U.S. authorities while claiming the foreign tax credit for the French income that was already taxed by France.

Yes, it's complicated. The best advice I can think of would be for the OP to find a French tax accountant who speaks English, and who is familiar with the U.S. tax system. And talk to the French and U.S. authorities. All financial information is kept computerized nowadays, and as such it is traceable. It's worth the while to make sure everything is reported correctly according to the letter of the law.
It will be hard for her to get a French bank account anyway. And if she does I doubt she will have enough going through for the IRS to care, she can declare it if she so wishes, that has nothing to do with the french government!

A french tax accountant will know how hard to would be for the OP to get into the french system anyway and say why bother.

You think more is openly shared between countries than is accurate. She would also need to be in France for some time before even applying to start a business there to become self employed etc.

OP if you stay in france for less than 185 days you have no worry at all, maybe it is easier if you would feel uneasy with the above paperwork. Which could cost quite a lot of money in itself
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