# Taxation and social charges, please help



## NewYorker in France (Nov 30, 2021)

I’m an American and just moved to France with my wife on a long-stay visa.
We’re trying to decide if we should go through with the residency permit, we are somewhat uncomfortable because we are unfamiliar with the taxation and the social charges.
We receive one pension and one social security and some dividends from stock.
We have the following questions and would greatly appreciate the help and the clarification.

Do we have to pay taxes to France even though the income is from the USA?
In a month’s time, we’ll qualify for the French health care but we understand that we have to pay into the system we are anxious to know what this will mean for our financial situation any input will be greatly appreciated. based on this information, we will decide if we will be able to stay in France or go back to the USA


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## Bevdeforges (Nov 16, 2007)

It sort of depends - on a bunch of things. But to answer your questions:


NewYorker in France said:


> Do we have to pay taxes to France even though the income is from the USA?




On the pensions, no. You declare the income, but you will receive a credit for the tax generated at French tax rates - so it should come down to 0 (or darned close). I'm not sure about the dividends. There is a US-France tax treaty that specifies how all that works, but the idea of the treaty is to avoid double taxation. 


> 2. In a month’s time, we’ll qualify for the French health care but we understand that we have to pay into the system we are anxious to know what this will mean for our financial situation any input will be greatly appreciated. based on this information, we will decide if we will be able to stay in France or go back to the USA​


You need 3 months of residence in France to qualify for the French system. And even then, it would be much better if you have validated your visa (i.e. to turn it in to a residence permit). If you are on retirement pensions (including US SS) you won't have to pay for the French national system, though you should definitely look into getting a mutuelle for "top up" insurance (to pay the part of health care costs that the national program doesn't pay for). Figure on anywhere from 50€ to 150€ or more per person per month for a good mutuelle for retirement aged people.


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## NewYorker in France (Nov 30, 2021)

Thank you for your reply. My wife is receiving the pension and the ss I retired early I'm 57 yrs old and not receiving any pension or ss yet. do I have to pay into the healthcare system? once again thank you so much


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## Bevdeforges (Nov 16, 2007)

I'm not sure, but I think that it's the "household" income source that is taken into consideration. Depends, I suspect, on the level of your investment income or whatever else you have coming in to support yourselves. However, even if you do have to pay for the national health care plan, the cost is nothing compared to what health insurance costs in the US. And, it covers much more than anything in the US (even when you consider the cost of the mutuelle).


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## NewYorker in France (Nov 30, 2021)

Thank you.
your help is greatly appreciated.
My wife and I arrived in France in October 2021 is there any advantage to filing taxes this year?
Also, as soon as we arrived we have validated our long stay vias but as of today, we haven't received an appointment with OFII any thoughts?


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## Bevdeforges (Nov 16, 2007)

I'm assuming you have "visitor" visas - which, on validation, serve as your residence permits (titres de séjour) for your first year in France. I'm not sure that you will be called for an appointment with the OFII - although maybe for a medical exam. The protocol keeps changing, but for a visitor visa the process is very simple.

It wouldn't hurt to file taxes this year. (Tax declarations for 2021 aren't due until sometime in May, 2022.) Obviously, you'll declare your income only for the time period that you have been in France (i.e. the last quarter of the year) and it's highly unlikely you'll be assessed any taxes unless perhaps you have very significant investment income over and above your US SS. You may find, however, that sometime (when you least expect it) having an avis d'imposition (the tax assessment they'll send you at the end of the summer) for your initial 3 months here may come in very handy. 

Filing for 2021 will also get you set up in the system and you'll be assigned your various tax numbers that you'll be able to use next year to file online from the get go. The first time through, the system is a little bit daunting, but if you have consulted with your local tax office to do your initial partial year declaration for 2021, you'll have a model to follow that should stand you in good stead.


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## NewYorker in France (Nov 30, 2021)

your wisdom is greatly appreciated. my wife and I are trying to decide what would be our best move. we worked very hard on getting the long-stay visa and our intention is to live in Franc for part of the year 
In the USA we receive our healthcare as part of my wife's retirement package. our healthcare in the US is costing us approximately 300 euros a month. 
As I have mentioned before we are living on my wife's pension and her ss and some dividends from stocks. my understanding is that we will not have to pay taxes in both countries, however, we'll have to pay social charges; I did some reading and it's approximately 17% .
Our situation will be that we have to pay income taxes to the USA and social charges to France (is it 17%of our calculated income?)


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## Bevdeforges (Nov 16, 2007)

NewYorker in France said:


> Our situation will be that we have to pay income taxes to the USA and social charges to France (is it 17%of our calculated income?)


That is a vast over-simplification and not entirely accurate. You won't pay "social charges" on the US SS. Not sure if that's due to the tax treaty or the "social security" treaty. (Social security in France includes all the various social insurances, not just retirement as in the US.)

The stock dividends from the US will need to be reported and treated as foreign source income, but with that full tax credit for the pension income, any tax on that will be trivial. The "social charges" you speak of are a separate tax that actually is supposed to cover the health care system debt - payment of those "social charges" does not entitle you to health care cover, but in any event I don't believe you'd be subject to the 17% rate, if you're subject to the CRS/CRDS at all. (But the only investment income I've ever had in the US was my IRA account and that's considered "pension income" for French tax purposes.)

Depending on the amount of the dividends, chances are you will pay 0 income tax here in France. (Don't forget, France receives more than 50% of its revenues from the VAT, not from income tax.) Then there are the other taxes - taxe d'hab, taxe fonciere and whatever else. 

You may want to make an appointment with your local tax office early in the tax season to ask them how to file and get their advice about your situation, given that you appear to be planning on living "part time" in France. While there isn't a 183 day rule here, they may be able to give you some practical advice on how to proceed as part-time residents (or at least how to fill out the forms).


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