# British Director with CSJ



## Micb1905

Bonjour everyone, i've been lurking on the forum for a while and finally time for my first post (of many hopefully!)

Looking for some real world experiences/advise and extensive searching online as well as speaking to some accountants hasn't give me black and white answers and have been contradictory.

bit of back story, i'm a ltd company director and shareholder of UK companies and receive my earnings via salary and Dividends, all tax paid in the UK.

I was living in france for the winter pre brexit and working remotely so took advantage of the brexit agreement and applied for my CSJ as i was in a position to easily do so and had some future plans to remain in france (easier to get it that way so why not) - this is *"toutes activities professionnelles"*

i then returned home to the UK for a while and then purchased a french property January 2022. I dont plan on living in france full time at the moment as im still fairly young and have some obligations in the uk to attend to but mostly work remotely. im assuming my time will be split around half and half.

Now my thinking is, it doesn't really matter how many days i spend here and there down to the fact i have my residency permit for 5 years, however my main concern is the tax implications of the situation.
Realistically, i want to remain paying my tax in the UK, not only because its cheaper, but also much simpler with our current setup.

Basically im looking for some first hand experience of someone who's done something like this or similar, i'm unsure what i need to do now, as well as if i would be better off surrendering my CSJ or not.

All help welcome and well received. 

- Michael


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## EuroTrash

I don't think there is any need to surrender your CdS as such. The deal is that France is giving you 5 years during which you have the opportunity to qualify for "permanent" residency, and at the end of those 5 years it will check whether you did or not. In the meanwhile I don't think it really wants updates. If at the end of 5 years you are not recognised at all by the French admin system - no tax number, no sécu number etc - it will be pretty clear that you didn't qualify and I wouldn't expect them to issue another card.
I'm sure there are increasing numbers of Brits who obtained WARPs because they could, and have subsequently changed their minds about living in France for whatever reason.
But I would be careful about working remotely in France on a regular basis with no formal arrangements in place. Even before Brexit this wasn't permitted. If you don't want to commit to France, I think to avoid potential complications you should spend the clear majority of your time in the UK, visit your holiday home in France to take time off and limit your work involvement here to checking emails and replying to anything that is urgent, otherwise as you say the fact of you having in the past claimed to be residing in France, could lead to queries about tax and social security obligations.


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## Micb1905

EuroTrash said:


> I don't think there is any need to surrender your CdS as such. The deal is that France is giving you 5 years during which you have the opportunity to qualify for "permanent" residency, and at the end of those 5 years it will check whether you did or not. In the meanwhile I don't think it really wants updates. If at the end of 5 years you are not recognised at all by the French admin system - no tax number, no sécu number etc - it will be pretty clear that you didn't qualify and I wouldn't expect them to issue another card.
> I'm sure there are increasing numbers of Brits who obtained WARPs because they could, and have subsequently changed their minds about living in France for whatever reason.
> But I would be careful about working remotely in France on a regular basis with no formal arrangements in place. Even before Brexit this wasn't permitted. If you don't want to commit to France, I think to avoid potential complications you should spend the clear majority of your time in the UK, visit your holiday home in France to take time off and limit your work involvement here to checking emails and replying to anything that is urgent, otherwise as you say the fact of you having in the past claimed to be residing in France, could lead to queries about tax and social security obligations.



Thanks alot, 5 years is a long time, i force my time in france only increasing in the coming years so im currently trying to get a bank account setup etc along with tax fonciere etc for the new house so i assume by the time my 5 years is up i will be well and truly in the system. Im yet to do a tax return which i know is a big problem but ive only recently found out this is something i need to do! hence me now asking the question about taxation etc so i know what im in for.

cheers.
-Michael


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## EuroTrash

Nobody knows yet what the procedure for changing the 5 year WARP card for a 10 year one is going to be, so it's impossible to do more than guess at what you might be "in for". France was very "generous" in issuing the 5 year WARP cards, they gave everybody the benefit of the doubt and they may decide to do the same again. Or the thinking may have been, let's make it easy and give everybody a chance to start with, and sort the sheep from the goats at renewal time. Or the policy may be fluid and it will depend on the state of UK/FR relations at that point, and how the UK has treated its EU residents. If France does decide to apply the '5 years continuous legal residence with a start date pre Brexit' criteria more rigidly, you will have a problem because whilst tax returns are important, there is more to living in France than filling in your tax form each year. If you claim to have been economically active they would expect there to be a record of your social contributions dating back to pre Brexit (because if you work in France, you must by law pay social contributions in France), if you claim to have been running a business here they would expect to see your business registration dating back to pre Brexit (because if you run a business in France it must by law be correctly registered in France) etc. You can't register a business retrospectively, you can't register yourself as an employee retrospectively, you can't pay social contributions retrospectively (or at least not without a lot of hassle and possibly penalties). I imagine there will be some tolerance because they will understand that those who rushed across at the last minute, needed a few months to get themselves sorted out, registered and paying their dues. But waiting for nearly two years before starting to get things in order, might be pushing it a bit. So I think you should be prepared for the possibility of France asking for justificatifs that it will be impossible for you to produce. On the other hand it may ask for nothing at all.
Just curious if you do in fact have a carte vitale, and if so, on what basis?


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## EuroTrash

Micb1905 said:


> my thinking is, it doesn't really matter how many days i spend here and there down to the fact i have my residency permit for 5 years


I just remembered this comment that you made - of course one of the criteria for qualifying for residency under the WA is that for the first 5 years you have spent no more than 6 months per year outside of France. I assume you know this. So yes, up to a point it doesn't matter, but once you go beyond to 6 months outside of France within the calendar year then it does matter very much.


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## Bevdeforges

Net-net, whatever your living arrangements between two or more countries, you don't get to choose which country you pay your taxes to - you pay in the country (or countrIES) where you meet the tax residency requirements. 

And just FYI, if you do get a bank account set up as a "resident" account, your bank will send you and the Fisc the necessary tax information for filing your tax declarations. Not sure if that will come back to bite you later if you decide that you are not really "resident" in France. Non-residents with holiday homes in France pay taxe fonciere on pretty much the same basis as the residents do, so you may want to discuss this with the bank as you are negotiating for an account. (Actually, it may be somewhat "easier" to open a non-resident account since they won't be expecting you to deposit your salary every month if you're non-resident in France.)


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## EuroTrash

I suppose the underlying question here is, Is it worth starting the process of building a dossier in France at this stage with a view to trying to go ahead with qualifying for residency under the Withdrawal Agreement, or would it be a waste of time and effort and possibly money, and risk ending in a refusal and potentially opening a can of worms. I don't think it's possible to give a definitive answer so it is not surprising that the OP is finding contradictory info and the accountants don't know what to tell him.
Simply in terms of of filling in a 2021 income declaration as a French resident, it strikes me that there could be various complications with this. For one thing, it sounds as if you have already filed taxes for 2020-2021 in the UK, or you intend to. If you now start claiming that your main home has been in France since Dec 2020 or whatever date you claim to have started living here, that would mean that as of that date your dividends at least are taxable in France not the UK. Which wouldn't fit with what you said about wanting to continue paying all your taxes in the UK. You would have to pay the tax on your dividends in France, tell the UK you no longer live there, and reclaim the tax that you will have paid there.

Then there's the salary, which if you did that work whilst physically present in the UK would still be taxable in the UK and would declared in France as "foreign income" (social charges would be payable I believe, but probably no income tax). But this in turn might raise questions further down the line about how a resident with a 5 year WARP card who isn't registered as a cross border worker can have spent a year working solely in the UK and at the same time spent more than half that year in France. On the other hand if you were working remotely in France for some of the time, then you get into all the social security / employment / business registration issues.

Plus if you happen to be the sole director/shareholder of a UK company there could be issues around that.

Then say you get all that sorted, when it comes to renewing your CdS you could still be blindsided if you haven't had health cover in force in France continuously for the full 5 years (legal requirement), and you are required to submit justificatifs to prove you have.

I'm thinking of all kinds of potential what-ifs and worst-case-scenario pitfalls because it's what I do, I always like to have an answer up my sleeve ready for every foreseeable query or problem just in case it does arise. But I do think that if you want to pursue this, you need to be speaking to an international tax consultant. It won't be cheap, but you need someone who knows the potential pitfalls on both the French side and the UK side and how to bypass them. A normal French accountant isn't going to be able to advise on that, anything outside of the French tax code is outside their expertise..

Of course these are just my thoughts and interpretations, any or all of it could be wrong and other people will no doubt have other views and different comments and suggestions.


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## So Simple

I'm following this post with interest, as I'm in a similar position regarding employment status, but have never been resident in France, but currently looking into the feasibility of buying a property.

I won't hijack this post, but will post separately.


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## Micb1905

EuroTrash said:


> Just curious if you do in fact have a carte vitale, and if so, on what basis?


i dont ! when making the CDS application, the part that asked for health cover i provided a copy of my GHIC card and they accepted it


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## Micb1905

EuroTrash said:


> I suppose the underlying question here is, Is it worth starting the process of building a dossier in France at this stage with a view to trying to go ahead with qualifying for residency under the Withdrawal Agreement, or would it be a waste of time and effort and possibly money, and risk ending in a refusal and potentially opening a can of worms. I don't think it's possible to give a definitive answer so it is not surprising that the OP is finding contradictory info and the accountants don't know what to tell him.
> Simply in terms of of filling in a 2021 income declaration as a French resident, it strikes me that there could be various complications with this. For one thing, it sounds as if you have already filed taxes for 2020-2021 in the UK, or you intend to. If you now start claiming that your main home has been in France since Dec 2020 or whatever date you claim to have started living here, that would mean that as of that date your dividends at least are taxable in France not the UK. Which wouldn't fit with what you said about wanting to continue paying all your taxes in the UK. You would have to pay the tax on your dividends in France, tell the UK you no longer live there, and reclaim the tax that you will have paid there.
> 
> Then there's the salary, which if you did that work whilst physically present in the UK would still be taxable in the UK and would declared in France as "foreign income" (social charges would be payable I believe, but probably no income tax). But this in turn might raise questions further down the line about how a resident with a 5 year WARP card who isn't registered as a cross border worker can have spent a year working solely in the UK and at the same time spent more than half that year in France. On the other hand if you were working remotely in France for some of the time, then you get into all the social security / employment / business registration issues.
> 
> Plus if you happen to be the sole director/shareholder of a UK company there could be issues around that.
> 
> Then say you get all that sorted, when it comes to renewing your CdS you could still be blindsided if you haven't had health cover in force in France continuously for the full 5 years (legal requirement), and you are required to submit justificatifs to prove you have.
> 
> I'm thinking of all kinds of potential what-ifs and worst-case-scenario pitfalls because it's what I do, I always like to have an answer up my sleeve ready for every foreseeable query or problem just in case it does arise. But I do think that if you want to pursue this, you need to be speaking to an international tax consultant. It won't be cheap, but you need someone who knows the potential pitfalls on both the French side and the UK side and how to bypass them. A normal French accountant isn't going to be able to advise on that, anything outside of the French tax code is outside their expertise..
> 
> Of course these are just my thoughts and interpretations, any or all of it could be wrong and other people will no doubt have other views and different comments and suggestions.



Thanks for the detailed response.

lots of food for thought here.

i think the main issue around the whole thing is its a big unknown and we wont really know what the proven methods of success have been for another few years.

i have a friend who lives in france and works for a UK company, they submit their tax returns here and pay the tax in the UK due to some double tax agreement as part of the brexit deal. she has been doing this for a couple of years now and all seems fine so i was hoping for something along those lines.

if the worst case scenario is that at the end of the 5 years they refuse to give me a new CSJ, i think i can like with that, if there are much larger implications to it then that's more where my concerns lay, ive even seen information online saying that the UK LTD company may have to pay french tax!

im hoping to make an effort as best i can regards the administrative side in france and hopefully stay out of trouble! (seems unlikely)

i definitely didn't hit 180 days in my first year but i was unable to travel here due to covid restrictions so im sure that will be taken into account.

2nd year i think i will be there or there about but im not exactly counting the days on an abacus. 

with any luck, over the next few years all this post brexit deal nonsense will be sorted out and we can use these forums for much more interesting and useful topics as opposed to tax!


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## BackinFrance

Brexit did not change the double taxation agreement between the UK and France. The agreement remains the same and never had anything to do with Brexit.


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## EuroTrash

Micb1905 said:


> i dont ! when making the CDS application, the part that asked for health cover i provided a copy of my GHIC card and they accepted it


Exactly, they gave people time to get themselves organised, but IMHO they're not likely to accept that a person has been covered on a GHIC for five years or even two years.



Micb1905 said:


> ive even seen information online saying that the UK LTD company may have to pay french tax!


The exclamation mark worries me because it suggests you are not familiar with the FR-UK DTA, which as BiF says has not changed since Brexit. The treaty sets out (I won't say very clearly, but if you read it carefully you will understand it) the various scenarios and their tax implications. There are indeed scenarios where UK companies are liable to pay corporate tax in France, no exclamation mark about it, it is simply what the agreement says.

Presumably your friend who works in the UK was correctly registered as a cross border worker or possibly a posted worker (though probably not if they're submitting a tax form in France but paying tax in the UK) pre Brexit; These are special statuses and the WA makes special provision for these people. They had to meet certain conditions in order to qualify for the status, and they need to hold the necessary paperwork. That said it seems a fair few people who claimed this status without having the correct paperwork who are being picked up in this year's tax exercise and having to get their house in order retrospectively - lots of posts saying 'France has sent me a tax bill for x thousand euros but I have already paid tax in the UK' and it turns out, they shouldn't have paid tax in the UK. I guess this kind of fits with what you say about all the post Brexit deal nonsense although perhaps not in the way you were thinking because where there is nonsense it is not being resolved by the rules being relaxed, it is being resolved by bringing people into line.

Seriously, I think that rather than look at other people's situations and ask for advice on forums, you should either take proper expert advice or else read the Withdrawal Agreement and the DTA carefully and consider how each bit of it applies to your own situation. Look at French social security regulations, look at the EU definition of legal residence, look at how the EU directive defines cross border workers and how they're dealt with under the WA, look at what the tax treaty says about a UK company and when it is considered to have an establishment in France. Muddling on and doing things that will have fiscal and legal implications, when you don't know the rules and have no idea what those implications might be, could end up stressful and expensive. Once a thing is done and on record with a papertrail proving that the situation existed, you can't undo it if later on you wish you'd done it differently. Not knowing the rules and explaining that you broke them in blissful ignorance, is no excuse under French law.


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## Bevdeforges

Just as a point of reference, we've had several people through here over the years (i.e. before Brexit) who worked out a plan whereby they continued working for their UK employer (not necessarily remotely - or maybe part-time remote with periodic travel back to the UK for meetings, etc.) while maintaining their primary residence in France. They checked things out in full beforehand with the UK tax authority, who said it was just fine.

Once the French Fisc caught onto what was going on, it turned out that, from the French side of things, that wasn't nearly as "fine" as the UK tax people had been saying.

Moral of the story is simply to check things out on both sides before getting into any sort of a situation that might turn nasty.


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## Nomoss

This may or may not be relevant, but it does demonstrate that once the French Fisc get their teeth in they don't let go.
British Couple Determined France Resident | French-Property.com


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## EuroTrash

Nomoss said:


> This may or may not be relevant, but it does demonstrate that once the French Fisc get their teeth in they don't let go.
> British Couple Determined France Resident | French-Property.com


Indeed.
I have probably mentioned this ad nauseam but as a translator I translated numerous legal documents sent by the fisc to UK individuals and companies whose tax affairs were under investigation. The documents tended to be very long because the format was to quote chunks of the French tax code and the DTA and explain exactly when and how, in their view, the rules had been violated and what the penalty for each violation is. As work for a translator it paid very well and it was easy money because it kept on being the same chunks of tax code that got quoted, but I can't say I enjoyed doing it because I found it nightmarish how thorough and how unsympathetic the fisc are once they move into top gear. In fact I suppose it has scarred me for life and that's why I keep going on about it. In serious investigations they obtain full historic information from HMRC aboutthe business itself, its structure and its turnover and its tax position in the UK, information from the utilities suppliers in France on contracts and consumption, copies of any advertising and marketing material that the company has put out, etc etc, even before they send the first letter in which they make the person aware that they are under investigation. That was actually what I was thinking of when I commented above that once you've taken this or that approach and done things a certain way, and the papertrail is there, you can't go back and change it however much you regret having done it that way. Since the fisc already have the proofs in front of them you can't argue about the facts, all you can do is employ a lawyer to try and argue the intepretation of those facts in the light of the tax treaty and the tax code, but usually these are the same arguments the fisc has had many times over and they have their responses ready

One client that has stuck in my mind that I felt desperately sorry for was the director of a UK registered company that had operated in France for part of the year over many years. Quite out of the blue one morning he received a 10 page letter delivered by huissier at 9am on the dot, and at 9.15 two tax officials arrived at the premises, demanded to see certain documents and took a copy of the computer hard drive. In alll my dealings with the client he seemed a perfectly nice genuine chap and he stuck to it throughout that he'd taken advice from his UK accountant and been assured he had no tax liability in France, which I felt was very probably true, but it cut no ice with the fisc. The case rumbled on for years and he was still waiting to be called before a judge when I retired from translating and lost contact with him. His French bank accounts had been frozen since the day the investigation started with many thousands of euros in them that he couldn't touch and since then he had ceased operating in France but he still had the threat of massive fines and even prison hanging over him.
And that is why it concerns me so much when Brits on forums confidently assume that continuing to pay taxes in the UK whilst operating in France will somehow give them permanent immunity from the fisc.


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## Nomoss

I find it amusingly sad every time someone posts their latest wheeze to get around taxes, having listened to all the advice they wished to hear, and confidently believing the authorities haven't already thought of it.


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## Nomoss

If I discover a foolproof way to get around taxes I won't tell anyone.

Here's another example of the Fisc at work British National Liable to French Capital Gains Tax | French-Property.com
This time with someone trying to prove they were resident!


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## EuroTrash

EuroTrash said:


> Or the policy may be fluid and it will depend on the state of UK/FR relations at that point, and how the UK has treated its EU residents.


In which case this probably won't help








Home Office taken to court over ‘pre-settled status’ rules for EU citizens


IMA says millions could lose right to live in UK if they do not reapply for settled status and this is ‘unlawful’




www.theguardian.com




_The Independent Monitoring Authority claims 2.6 million EU citizens are at automatic risk of losing their right to live, work and retire in the UK and may face deportation because of an alleged “unlawful” interpretation of the withdrawal agreement (WA) by the Home Office rules. _

(Mind you it seems a rather muddled article, the person who wrote it appears not to have understood the WA or what the dispute is about)


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## Nomoss

EuroTrash said:


> In which case this probably won't help
> 
> 
> 
> 
> 
> 
> 
> 
> Home Office taken to court over ‘pre-settled status’ rules for EU citizens
> 
> 
> IMA says millions could lose right to live in UK if they do not reapply for settled status and this is ‘unlawful’
> 
> 
> 
> 
> www.theguardian.com
> 
> 
> 
> 
> _The Independent Monitoring Authority claims 2.6 million EU citizens are at automatic risk of losing their right to live, work and retire in the UK and may face deportation because of an alleged “unlawful” interpretation of the withdrawal agreement (WA) by the Home Office rules. _
> 
> (Mind you it seems a rather muddled article, the person who wrote it appears not to have understood the WA or what the dispute is about)


Is that any different from Brits in EU countries being issued with WARP's with a limited validity?

I believe a comprehensive dossier has to be presented to renew them.


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## EuroTrash

I think part of the problem although it doesn't mention it in this article, is that the UK does not issue cards so it would be very easy for people with pre-settled status to forget.the date when they have to do something about it. 
But really the point as I understand it is that it is not the card you hold, or in the UK's case what your computer record says; that gives you a set of rights. The card is merely supposed to reflect the rights that you have qualified for by virtue of your circumstances. If an EU citizen protected by the WA has lived legally in the UK for 5+ years, then under the WA they have obtained the right to "permanent" residence and that right is not lost by failing to log in to the app and do whatever they have to do. They may end up in an irregular position administratively, and maybe they could legitimately be fined, but they have not lost the basic right to remain in the UK and they have no business being deported. The WA / the EU directives state clearly the conditions under which residence rights will lost, one of those being exceeding the permitted absences, but failing to renew your residence card or long on to the app is not one of those conditions.


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