Is the Cesu system only for residents?

Is it true that the Cesu system which simplifies employing a person in the home, such as a cleaner, is only for residents and not open to holiday home owners?  N.L.

19 December 2018
By Hugh MacDonald

Yes… and no. A spokeswoman for Acoss, the body in charge of the national Urssaf network, said it is correct that non-residents should not use the standard Cesu system – but there is a similar scheme specifically for them, called Tpee.

People can sign up for this at www.tpee.urssaf.fr and it is for anyone who employs workers in the home for personal services, such as gardening or cleaning, during their stays in France. It helps people make sure they are meeting their responsibilities in terms of social charge contributions for the employee.

To join the scheme, you click adhérer under Identification. The site has an English option.

Is a council pension a ‘government’ one?

My wife is due to start her UK local government pension soon. We are permanently living in France and have lived here for 12 years. We pay French tax. Is the pension taxable in France or does it come under the type of UK government pension scheme that is taxed in the UK? D.S.

Yes, a local authority pension is usually a “government” one.

The easiest way of knowing this is whether the pension is paid by the Paymaster General or not.

If so, then yes it is a government pension, and if not, then no. Otherwise, the pension generally qualifies as a government pension if it is paid by a government agency.

To see which pensions qualify, you can also check the list at this site: tinyurl.com/y9w8n7by.

Is there a double tax treaty with Germany?

I know a tax agreement exists between the UK and France but does the same apply between Germany and France? If tax is deducted at source in Germany, can it be taxed again in France?  C.C.

The general principle of double tax treaties is to ensure it is clear which country has what rights to tax what income – and one does exist between France and Germany.

So, in general, if income is taxed in Ger­many then that same income should not also be taxed in France. This said, it is not because the income is taxed in Germany that France has no right to tax it since, per the double tax treaties, it may be a kind of income that France has the right to tax and not Germany. In such a case you would have to confirm to the German tax authorities that you were resident in France, and not in Ger­many, so that Germany can stop taxing the income.

It should also be noted that some sources of income, such as rental income and government pension income (for example, from diplomatic service, military, civil servants) are only taxable in the country from which they come.

These incomes are not taxed in the country of residence but are “taken into account” in the French tax calculations. This is to ensure someone does not benefit twice from each country’s personal allowances and increasing tax bands. While the amount of tax paid in the foreign country, if any, is ignored, the effect may be to place any French taxable income into a higher tax band.

Can I work for foreign firm from France?

If I relocate from the UK to France but continue to be paid in GBP in the UK for the company that I work for (I am a homeworker so can work from anywhere), what do I need to do to be a legal resident in France?  R.N.

These issues are complicated, partly due to the application of VAT laws, although this applies to most countries, not just France.

While you may be paid by a foreign company, you will physically be working in France and,  technically, the product of that work is liable to French VAT, irrespective of whether or not this work were to be exempt from VAT, or charge-able at 0%, or below any threshold. As a result, the foreign company that is paying you will be seen by the French tax authorities as having a theoretical office here in France, called a succursale, and it is this office that will be seen to be employing you, not your current employer in the UK.

So any employer and employee social security contributions will be due in France on what would be seen to be your French salary, as will any VAT, corporation tax on the profit the succursale makes, and other company taxes.

The bottom line is that you cannot work in France for a foreign company and be remunerated by that foreign company since, were you to do so, you would be causing major problems for your employer. 

The exception to this is if your employer has a French company to which you can be seconded, as the rules relating to secondments are different.

Accordingly, the best solution for you would be to see if you could work as a contractor, but this would entail working for other people or companies as well in order, pursuant to French employment laws, to avoid your being nonetheless still considered as an employee of your contracting company.

This is an area that you would need to discuss with your em­ployer as it affects them as well as you, and would cause them more problems than you.

Likewise, it is an area that would need consultation with a specialised professional.

The information on these pages is of a general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case. No liability is accepted in respect of these articles. These articles are intended only as a general guide. Nothing herein constitutes actual financial advice.

The Connexion welcomes queries and publishes a selection with answers every edition. However, please note that we cannot enter into correspondence on money topics. Queries may be edited for length and style. Due to the sensitive nature of topics we do not publish full names or addresses on these pages.

Send your financial queries to Hugh MacDonald at news@connexionfrance.com

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