By living 4000 miles (6400 kilometers) from Washington, DC we can escape some of the news that revolves around the White House but once people here learn that we’re from the US they definitely want to talk politics. That’s been the case over the last 25 years that we’ve been visiting France no matter who the president was/is. So while we may be a long way from the Oval Office at 1600 Pennsylvania Avenue, there’s an address right next door at 1500 Pennsylvania Avenue that’s as close as your bank account. The Internal Revenue Service knows where we live.
The US is one of the few, maybe only, countries that collects taxes based on citizenship and not on where you live. That means if you move to France, for example, you still pay Uncle Sam your federal income tax just as if you lived in Lebanon, Kansas at the geographic center of the USA. Luckily there is a treaty in place that gives you a credit equal to the income tax you have paid to each country that is supposed to avoid double taxation. We still have to fill out the IRS 1040 and its French equivalent, but since our pensions are in the US and our visa/resident card prevents us from earning anything here, at least we have to write only one check, and it’s in English!
There are actually 3 formulaires (forms), all found on the government website https://www.impots.gouv.fr/portail/ that we have to send in:
Formulaire 2042, the general tax form, much like an IRS 1040
Formulaire 2047, for income earned outside of France
Formulaire 3916, for all bank accounts located outside of France
It’s really not all that different from what we had to also file with the US except we used an online software preparation package for that. Those exist here in French, starting around 60 euros/dollars, but we chose to go the manual route with a dictionary and using some of the links you’ll find at the bottom of this page. There is an online English-language version of the French news and we downloaded their “2017 French Tax Forms” booklet that includes some line-by-line assistance. Despite the subtitle that clearly states “especially written for Britons moving to and living in France” we found the instructions helpful since the bulk of our income is from government pensions that are covered by the double taxation treaty.
One of the suggestions we followed from this booklet was to include a statement, in French of course, reminding the tax authorities of this treaty and and why we are part of it. Along with that statement we also attached a copy of our house deed, copies of our residency cards, our bank account details, and the coverage letter from our health insurance company. That last item is especially important since everyone living in France is either covered by universal health care, paid for by taxes, or privately-paid insurance that must be verified. We anticipate joining the nation’s health care system next year.
The first year that you fill out the income tax forms here, it must be done on paper. Once completed, you can mail them to the local tax authority or, as we did, just drop them off at the large mailbox on the fence outside the Centre Des Finances Publiques. Then the wait begins. It could be as late as November before we find out if we owe anything and even then we would have the option of paying a lump sum, or spreading it out quarterly or monthly. At that point we will be provided with a tax ID number that we can use in the future to fill out the forms online, avoiding the need to use any paper at all.
Although, like Toto and Dorothy, we may no longer be in (Lebanon) Kansas, we still pay our US federal income taxes as if we were. With luck, that’s all we’ll need to pay.
Some of the links we consulted:
http://www.efl.fr/chiffres-taux/fiscal/impot_benef/cours.html the official exchange rate for dollars/euros
This excerpt from a discussion on the Expat Forum succinctly explains when to file your first income tax form in France:
The French tax year is the calendar year Jan 1 to Dec 31.
The window for submitting your declaration for that year is April/May of the following year. You can’t (normally) submit a declaration at any other time.
When you make your first declaration, you declare income between the date of your arrival and Dec 31 of that year.
So if you arrived on July 1 2021, then in May 2022 you will declare worldwide income received between July 1 2021 and Dec 31 2021.
There is an annual tax exercise. There is a date when the paper forms become available/the online platform is opened. And there is a deadline. The window is open for a month or so. Everybody has to submit their declaration within that window, first timers who are declaring for second part of the tax year just finished, regulars who are declaring a full year, and leavers who are declaring for the first part of the tax year just finished.
The only time you would declare outside that window would be if you had missed the deadline and were putting in a late declaration.
You can’t declare early, there is no mechanism for that. The forms are changed each year. You have to wait until the tax office has finalized and printed the forms/tweaked the online portal and is ready to start the annual tax exercise.