Every May full-time residents of France are required to file la Déclaration des Revenus (Declaration of Earnings), the annual tax declaration equivalent to filing your 1040 tax form in the US. Since France is our principal residence and we have lived here longer than a year, we are required to file a Déclaration des Revenus for the first time since moving to France.
So, how did we — with our rudimentary skills in speaking French — figure out how to file our Déclaration des Revenus?
In this case the Internet, Google Translate, expat discussion forums, and numerous professional websites were all major tools. I’m often thankful that we have so much information available from the Internet. Neither of us can imagine the struggle of expats living abroad before such tools were readily available. One key source for collecting information was the online English language newspaper, “The Local, France’s News in English” that reminded readers in April that a Déclaration des Revenus would be due in May. The article listed the forms required, had advice from an expat tax expert, and listed links to La Direction Générale des Finances Publiques, the French version of the US Treasury’s Internal Revenue Service. The Finances Publiques’ web site allows you to download forms and even file your Déclaration des Revenus online. (There are also expat tax preparation services in France, but ours was pretty straight forward.)
Due to my lack of confidence with online filing the Déclaration des Revenus in French, I elected to visit the local Centre de Finances Publiques (tax office) to pick up the needed forms. Between my “shopping list” of forms, my very basic French, the helpful Finances Publiques’ representative’s basic English, I managed to pick-up the required forms. Like our US Tax Return, the Déclaration des Revenus consists of several forms. For us, we needed:
The main tax form (like the US tax form 1040) listing our name, address, and global income.
This form is for listing any income earned outside of France. Our pensions are considered foreign income that must be declared on this form, as well as the total noted on the Formulaire 2042.
On this form we list all bank accounts that are located outside of France.
Filling out these three forms was actually simpler than completing many of my past US Tax Returns; but, of course, these forms and directions are written in French and I had to struggle with the language barrier. Yes, French tax forms share with US tax forms the ability to create stress and give the preparer a total feeling of confusion and inadequacy.
Using an English-French dictionary, Google Translate, and a tax help guide from “The Connexion: France’s English-Language Newspaper” written for British expats, it took about two days to (hopefully) correctly complete the documents. Tracy double-checked the translations, Dollar-to-Euro conversions, directions, math, documents, and finally concurred that we had now had all the forms ready to submit.
The next big question was: to whom or where do we submit Déclaration des Revenus? Unlike US tax forms, there was no mailing address on any on the forms, nor directions for how to file. So we gathered up all the completed forms and visited the local tax office again. Tracy spotted a large mail box outside the office door with a sign marked for Déclaration des Revenus. But first I visited with the Finances Publiques’ representative again and asked her to double-check that our Déclaration was complete. (Thankfully the representative spoke some English, which was extremely helpful to me.) She asked me to include a copy of our 2013 rental contract with our Déclaration des Revenus and then the package would be complete.
We had a quick round trip back to the apartment, made a copy of our lease, and returned to speak with the same Finances Publiques’ representative for one last final review. The representative believed the package was complete now and officially accepted the Déclaration des Revenus. Yet another milestone first with living in France.
So what happens next?
Unlike the US, no payment is ever sent with the Déclaration des Revenus. The Finances Publiques reviews the financial situation on the forms and later sends an Avis d’Imposition (a tax bill) or an Avis de Non-imposition (certificate of non-taxable income) usually around mid to late August for the amount of taxes due. Since it is our first filing, we are told that we could receive a response from the Finances Publique as late as November or December
Now for the complexity. The United States is one of the few countries that taxes on the basis of citizenship rather than residence. The United States requires that US citizens file a yearly tax return with the US Internal Revenue Service as long as their income (earned in the US or earned abroad) is over $9,000. Americans working abroad are generally exempt from paying tax on their first $97,600 in foreign earned income, but they are still required to file a return.
Tracy and I do not earn income in France and we previously filed our US tax return in April.
To avoid double taxation for citizens living abroad, there is a tax treaty between the US and France, the “Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital (1994).” The biggest issue for us addressed in the treaty is that pensions from a US source is taxed only by the United States and not by France. So, in theory, we are only required to pay our US taxes, however, in actually application we may still receive a tax bill.
This is our first time filing a Déclaration des Revenus with France, so we are interested to see exactly how this will work out for us. Every expat’s tax situation is unique unto itself. So we may have no French Impôts sur le Revenu (income tax) liability, a small French income tax bill (for non-pension interest or dividends), or no income tax liability but a bill for social service fees (if you call it a “fee” it doesn’t fall under the “tax” exemption.)
We will tell you about the outcome sometime between August and November when we hear from La Direction Générale des Finances Publiques. Keep your fingers crossed that we only get a Avis de Non-imposition (certificate of non-taxable income).