Want to Research My Girlfriend Out of Her Catch 22

June 23, 2011 2:00 PM

TLDR: Are there any in-depth, English-language guides to the French tax system?

My girlfriend works in France, running her own business as a nurse. She tells me that when she started working, the government did not charge the normal income taxes (not sure if it was part or all) for the first two years, but that she is required to pay income taxes for two years after she stops working--and those taxes will be based on her final years of work (so if she pays 20,000 Euros in taxes the last year she works, she'll have to pay 20,000 Euros the next two years).

She would like to not work in France starting ASAP, but if she stops working now, she'll pay a lot of taxes--this requires her to save the equivalent of about one year's take-home pay. But how do you save that much money without working more and incurring a higher tax burden for the next year? arg!

I've urged her to seek out a way to defer this requirement (because how else could people go back to school or go raise their kids or whatever?), but even though she hasn't spoken with her accountant or the tax officials, she insists there's no way to do so.

My question is: How can I research this myself? Cursory searching has led me only to basic overviews of the French system in English, and nothing on this topic. Part of the problem is that I don't speak French fluently (though I can read it decently) and don't know the terms of art in French.

Thanks for any help you can provide!

posted by pollex to work & money (8 answers total)

I can't vouch for the accuracy of what is contained in this iste, but here's a link: http://www.french-property.com/
posted by dfriedman at 2:33 PM on June 23, 2011

I am an attorney, but I am not your attorney. This is not legal advice.

There's enough money at stake here that it probably makes sense to hire an English-speaking tax attorney or accountant with experience with the French system. Here's one, for example.
posted by jedicus at 2:38 PM on June 23, 2011

Seconding jedicus... if the actual amounts are actually in the 40k Euro range, it would be silly to not talk to an accountant / tax attorney.
posted by Perplexity at 2:39 PM on June 23, 2011

I am a lawyer too. My girlfriend won't be making any final decisions based on my English-language layman's understanding of the French tax system, I'm just looking to get my foot in the door of this argument!
posted by pollex at 2:51 PM on June 23, 2011

What electronic resources do you have available, if you're a lawyer? The IBFD series (available on Checkpoint, and thus presumably on Westlaw) has a survey of tax systems by country, and there should be a BNA portfolio on French tax. I don't know whether those sources would cover something like this, however.

Based on your question, it sounds like your GF is a French national, not a U.S. expat. But if she were U.S., the big accounting houses have desks that handle this stuff.
posted by Admiral Haddock at 3:15 PM on June 23, 2011

Hi, I'm originally from the US and recently got French citizenship (lived here for 12 years now), and I was once a freelance translator under a very similar tax scheme as that for exercice libéral de la profession d'infirmière conventionnée. <– first confirm that this is indeed what your nurse gf is registered as. (If not, then I'll be even more confused, because "running her own business as a nurse" has only that as a legal, above-board option.) If that's it, you can get a good basic overview here: Fédération Nationale des Infirmiers : obligations fiscales des infirmiers libérales. She'd be under the bénéfices non commerciaux type of profit declaration, that link is to the official French tax authority's explanation of it.

I am a bit confused at her presentation of the issue. Income = income tax, there is no relaxation on income taxes for anyone. (Obviously, there are different tax brackets and of course, people earning below a certain level won't pay tax, but it's not a relaxation per se.) There is also no such thing as being made to pay income tax when you are not earning income.

Are you sure she's not grouping together other taxes unique to France in order to make things more understandable for you? Here there's the taxe professionnelle which can indeed be waived for a year or two, depending. And she might, might continue to have to pay it for another two years after stopping, but that's contingent on a wide array of things. Long story short: she needs to contact a French accountant, there are those who specialize in the various types of freelancing, especially medical professions, and she probably knows how to look for that sort of thing herself. They're not expensive; freelance translator friends of mine regularly praise their accountants for saving them more money than the accountant costs.
posted by fraula at 1:54 AM on June 24, 2011

On re-read, I see you say she already has her own accountant. Yeah. She needs to speak with them.
posted by fraula at 1:57 AM on June 24, 2011

Thanks for the perspective, Fraula. She is an infirmiere liberale, and yes, she's probably grouping together other French taxes. I agree that she needs to speak to her accountant, but she quite literally thinks the question is silly.

I'm trying to see if I can find some information that would give her a push in that direction.
posted by pollex at 4:34 AM on June 24, 2011