There are certain circumstances under French law whereby a non-resident is required to appoint a tax representative in France to carry out certain formalities.Given that the activity of French tax representative is regulated, there are only few companies who can actually provide this service.
The cases in which non-residents may be required to appoint a French tax agent are notably as follows:*
- For the purposes of French personal income tax – Non-residents who carry on activities in France or who have French situated assets (article 164 D of the French Tax Code);
- For the purposes of French wealth tax – Non-residents who have French situated assets (article 885 X of the French Tax Code);
- For the purposes of French corporation tax – Non-residents companies who carry on activities in France or who have French situated assets (article 223 quinquies A of the French Tax Code);
- For the purposes of French capital gains on the sale of French real immovable property or shares in French real estate companies – Non-residents who wish to carry out the sale of such assets must, in principle, appoint a French tax representative (article 224 bis A of the French Tax Code);
- For the purposes of the French 3% annual tax on real estate – Non-residents companies who own French real estate (article 990 F §4 of the French Tax Code);
The use of the services of the French tax agent can be a substantial expense, with remuneration generally based on the value of the underlying assets, i.e. upwards of 1%.
However, since 1 January 2015 EEA resident individuals are no longer required to use a tax representatives, notably with regards to the sale of real estate.
This obligation was deemed contrary to EU rules and has now been removed pursuant to a ruling of the Court of Justice of the European Union and to action on the part the European Commission, thereby reducing the cost and amount of formalities in respect of the sale of French real estate for EEA residents.
Triplet can guide and assist you through the process of selling or buying French property and complying with all legal and fiscal requirements in a manner that is understandable to you and so as to avoid any unnecessary pitfalls.
For further information on tax representatives please click here.