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This page is intended to keep our nonresident contacts informed of pertinent legislative developments or new legal precedents concerning international affairs which may impact their operations and require preemptive action.

Published on Monday 25/04/2016

According to Article 4 A paragraph 2 of the General Tax Code (GTC), nonresidents are liable for income tax on their income from French sources, subject to a sliding scale and the household income splitting system.


Article 197 A of GTC specifies that for nonresidents, income tax cannot be less than 20% of the net taxable income from French sources (or less than 14.4% of the net taxable income from French sources in French overseas departments).

However, if the foreign taxpayer can show evidence that an average tax rate in France of less than 20% would be assessed on all of his income from French and foreign sources, it is this average rate that will be applied to calculate the tax on the income from French sources only.


To take advantage of this tax rate of less than 20%, nonresidents must provide justification after receipt of the tax notice; this involves a lengthy and complex process.


Article 120 of the amending finance law for 2016 n°2015-1785 makes two modifications to Article 197 A of GTC:


- on the one hand, nonresidents have the option to make a statement certifying the amount and the nature of their worldwide income, pending production of the corresponding supporting documents. This declaration permits immediate application of the tax rate of less than 20% for income from French sources;


- on the other hand, only nonresidents settled in a European Union member State or in a state having entered into a tax treaty with France benefit from this article.


This measure will take effect for the taxation of 2015 income to be reported in 2016.


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Tags : International tax law

Published on Friday 15/04/2016

Article 164 of the General Tax Code (GTC) stipulated that nonresidents who owned one or more homes in France were subject to income tax on a flat-rate basis of 3 times their real rental value, unless the income they received from French sources was below the amount of this basis, in which case the amount of this income served as a basis for the tax.


Furthermore, this tax could be excluded in the event of :

- the conclusion of a tax convention avoiding double taxation and containing administrative assistance between France and the State of the nonresident ;

-  taxation greater than or equal to two-thirds of the tax that French nationals would have to bear in France, if they had their fiscal residence in France ;

- expatriation of French nationals due to job-related reasons when they had their residence in France for at least 4 years preceding their transfer.


Article 21 of the amending finance law for 2015 n°2015-1786 repeals the provisions of Article 164 C. This reform is in response to the decision of the Court of Justice which had considered that this article violated the principle of free movement of capital in the European Union (case 181/12 date 17/10/2013). This decision has been applied by the French Council of State (CE 26/12/013 n°360488 and CE 11/04/2014 n°332885).

Henceforth, nonresidents are subject to taxation in France exclusively on the basis of their income from French sources according to Article 4 A, paragraph 2 of the GTC.


This repeal will be effective with the taxation of 2015 income.



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The interdisciplinary expertise of the Selarl Bruno Bedaride, notaire in Paris covers the following areas: corporate law, international contracts law, legal and tax advice, advice for international transmission, real estate law, family office, real estate and company finance law. We offer more particularly our services to non residents or foreign company who wish to invest, move or create a business in France.