Converting foreign income for French tax forms

Converting amounts of UK or other non-euro zone incomes for French tax declaration purposes inevitably raises the issue of what rate to use – a common query received at the Connexion offices.

Occasionally a reader tells us their tax office has suggested using a slightly different rate compared to the one we have suggested in our annual tax guide, and there are various reasons why this could be:

  • Firstly, according to the letter of the law, you should use the actual rate on the date the income was received – this could be practical if you only receive foreign income a few times a year, but may not be otherwise
  • By convention however tax offices allow use of an average rate for the year. Connexion has previously been told by the Economy and Finance Ministry there is some leeway as to the method of arriving at this average as long as a ‘reasonable’ one is used.
  • In our tax guide we explain the method we use, which the ministry recommended to us, which was based on a ministerial response to an MP’s question a few years ago. It involves taking the Banque de France month-end rates for December 31 of the tax year in question and the previous year and averaging them. In the guide we have used this to calculate the rates for a range of currencies, from sterling to Canadian dollars or Danish kroner.

The Connexion’s annual guide to the French Tax Forms, aimed particularly at Britons living in France, is €12.50(+p&p) and is available in selected newsagents and also as printed and download versions at: Helpguides

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