UKC

Merry Christmas folks! I was wondering if anyone has experience of having a uk registered ltd company, working in the uk but living in France? I have done some research on the subject but it isn't very clear. As I understand it I would get paid into company account for which I will do a tax return then pay myself my wages into a French account as well as the company dividends. Is this legal or will I end up getting hit for French tax too through the double tax treaty? My gf and I were hoping to move to Cham next year and we would like to get things in place before we go if possible. All my work is uk based and I would just commute through Geneva every few weeks. Cheers dan

In reply to dannyW:

If you will be supplying "goods" digitally within the EU from one country to another then you have to charge (and account for & pay forward) VAT at the rate in the buyers country, even if you are not VAT registered.

Its a new rule.

In reply to Richard Wilson:
Cheers for the reply Richard.
Iam vat registered but I just supply labour. Basically I work on the rigs so I don't supply materials etc just myself as labour.

In reply to dannyW:

I think that it would depend on where you are fiscally resident. I'd advise caution as if you were living in France and using French social services they might well want you to pay tax there. If there is a loop-hole make very sure before hand as I've heard of several people that got caught out after a year or two and found themselves with a rather large back-payment of taxes and social charges to settle. These can add up to something like 50% of your earnings.

In reply to Bruce Hooker:
Yikes! I use an accountant at the minute over here and I would of coarse seek to use professional services in France to avoid the situation you mention above as I have heard similar stories. I just wondered if anyone has similar circumstances to my own and could point me in the right direction, maybe even recommend a reputable accountancy firm localish to chamonix. It seems a bit of a grey area and also looks pretty tricky to find an accountant who specialises in uk and French tax law but there must be someone somewhere.
Cheers dan

In reply to dannyW:

There used to be a rule in France if you worked offshore outside French waters you had zero French tax liability - this came to my attention offshore holland in 1993 and I'd be most surprised if this rule has survived - but worth checking in any case.

In reply to cander:
Cheers for that I will look into it, I would be astonished if this has survived but fantastic if that's the case!

In reply to dannyW:

the simplest option is keep a UK address and euro health card and be all most permanently on holiday.

A friend works on survey ships and hasn't paid UK or French tax for ages. unless there is a complex fiddle getting involved with the french bureaucracy would seem to be worth avoiding.

In reply to dannyW:

I can recommend a good accountancy firm that me and my wife use - they're based between Geneva and Chamonix so would be handy for you. PM me if you want the details.

I'm permanently salaried to a French company (although still need to fill out an income tax declaration like everyone else here) but my wife contracts to a company in the UK but as others have said, if you are living in France for more than 50% of your time, then you're obliged to pay French tax on 100% of your earnings no matter where the income is generated.

The French social services (URSAFF, RSI, CPAV etc) all require separate payments and is pretty complicated. However the actual income tax liability isn't as bad as many think especially with good accountants. As Bruce said, this can come back and bite you in the arse so if you're actually planning to be resident in France, I would get some professional advice.

In reply to dannyW:

There is some sketchy advice on this thread. And you don't need to see a French accountant. Not initially anyway. Just talk to an English one to start with. For what it's worth, there is nothing inherently wrong with owning a company in one country while living and working in another. But your company must obey the laws of one nation, and you those of the other. Your company will pay corporation tax on its profits in the UK. Meanwhile you, living in France, need to be registered with the UK tax authorities as resident in France for tax purposes and be sure that you qualify by residing there for more than 183 days per year (don't take my word for it though). Then you declare your wages and dividends from the company and pay tax on them in France. This is where it gets complicated. Your dividend contains a tax credit (essentially it's the corporation tax your company already paid meaning that the dividend comes tax free to a UK basic rate tax payer) paid in the UK and I have no idea whether you can claim that credit in France. So you need an accountant to tell you how to achieve this. In fact stop listening to me and go and see one before I get out of my depth!!

A friend who faced the same dilemma ended up ensuring he could be in Blighty for 183 days in order to keep all his affairs in the UK, but that was to avoid the punitive Scandinavian tax system.

In reply to dannyW:

You need to separate in your mind the company's profits and your own source of income ie. any salary or dividends you draw. Your tax position is to a large extent (though not entirely) independent of the company.

Your uk company will pay UK corporate tax at c20%on its profits as a starting point.

You will be subject to French tax on your personal income (eg dividends) if resident there but you may still suffer UK tax under some fairly new anti avoidance rules for short term non-residents. However, that's all subject to the double tax treaty.

There is also a possibility that the French authorities might want to tax the company dependent upon their rules on corporate tax residence, permanent establishments etc all again subject to the tax treaty.

If you have many links with the UK, you may also find it hard to shake off UK residence under the new statutory residence rules. These are deliberately worded to catch people spending a lot of time working in the UK and you would need to take great care over these and even then you may find that practically it is impossible to continue working in the UK without being UK tax resident. You could of course be dual resident, subject again to the tax treaty.

You will need some good local French tax advice and some decent UK tax advice too. This is a lot more complex than it may have originally sounded...

In reply to Skyfall:

Thank you to everybody who has contributed to this thread. I thought it was going to be a nightmare and it looks the case, some great advice on here that has built on the little information that I knew, really appreciated.
Cheers dan

In reply to dannyW:

A friend of mine works on the rigs & lives in Chamonix. I think he's away at the moment but he's probably someone worth chatting to so if you want you could pm me your email address & I'll forward it on. I always intended to pick his brains on the subject myself so could be the perfect excuse.

In reply to joelc:
Cheers mate pm sent