Service France

June 2008

Tax treaty between France and Denmark

The Tax treaty between France and Denmark will end on 31st December 2008 following a notification from the Danish government on 10th June 2008. This has important tax implications for Danish property companies owning French property. Investors should take immediate advice on their French tax position.

April 2008

Danish tax treaty

The tax treaty between Denmark and France allows for useful tax planning opportunities. The Danish Inland Revenue is currently in confidential discussions with the French Inland Revenue which may have implications for existing investment structures. Now is likely to be a good time for any such investment structures to be reviewed.

Update on French income tax (Impôt sur le revenu) for 2008

By David Anderson (solicitor and chartered tax adviser) and Nicole Gallop Mildon (French clerc de notaire) both of Sykes Anderson solicitors and Chartered Tax Advisers in London

When you have to return your declaration for “impôt sur le revenu” (income tax) depends on how you file your return and where you live. If you want to return a paper declaration, it has to be received by 30th May 2008. If you want to file your return online, the deadline varies according to where you live.

French Residents

You need to know which school holiday zone you live in - there is a very clear map on the French Revenue’s website:

Zone B and Corsica, the deadline is 11 June 2008 at midnight.
Zone A, the deadline is 17 June 2008 at midnight.
Zone C and the DOMs, the deadline is 24 June 2008 at midnight.

Non French residents - where you live still determines the deadline:

30 June 2008 for Europe, Mediterranean-bordering countries, North America and Africa and 15 July 2008 for Central and South America, Oceania and others.

New matters in relation to “impôt sur le revenu”.

There have been changes in the following:

1. overtime worked since 1 October 2007 is exempt from IR.
2. exempt student income for students now covers those who are 25 years old or younger on 1st January of the year being taxed, i.e. 1st January 2007 for taxes to be paid in 2008.  Previously it was for people aged 21 or younger.
3. in an increase from last year, the annual amount over which capital gains are taxable and need to be declared on the declaration is 20,000€, instead of 15,000 €.
4. from 2007, certain social deductions on fixed income financial products are now deducted at source.
5. the individual ceilings for payments made into an « épargne-retraite » are combined for couples who are married or have signed a PACS and tax payers can use the ceiling or part of the ceiling which is unused by their spouse/partner.
6. there is a reduction in your tax bill of 20€ for if you are declaring online for the first time in 2008 (subject to payment conditions).
7. there is a new tax credit on mortgage interest for this year for principal residences (subject to conditions).
8. tax credits for energy-saving and sustainable development have been extended to include the recovery and treatment of rainwater.
9. employing someone within one's home formerly gave rise to a tax reduction, this is now a tax credit.
10. there are also tax credits for people who return to work and move more than 200 km to do so and people under 26 years of age who work in sectors which have recruitment problems.
11. there are tax reductions for investment in tourist accommodation which have now been extended to social holiday accommodation that is purchased between 2007 and 2010.
12. the tax shield (“bouclier fiscal”) limits the amount of direct tax you have to pay in a year; the direct taxes to be paid in 2007 cannot exceed 50% of your income in 2006.  (Previously, 60%).  Social contributions will now be included in calculating the amount of tax.