AF offers the most comprehensive range of solutions for the contractor working abroad, including those who want to work in France. The right structure for you will be dependent on your individual situation from a personal and business perspective. In this brief article, we’re looking more closely at the different choices for working in France that Access Financial offers.
Opting for self-employment means the contractor registers as self-employed with the French authorities. This is a good solution for anyone who has an established contracting business back home as long as you do not have a fixed base or permanent establishment in France.
The taxes you pay when self-employed in France are dependent on the Double Tax Treaty between France and your home country where you are ordinarily a tax resident.
Social contributions are usually payable in your country of work, which in this case is France. It’s worth noting that social contributions in France are quite high compared to other nations, at around 31% of your total income. This can be mitigated if you obtain an A1 certificate for your home country, provided you qualify. As an example, in the UK you will pay two types of National Insurance if you are self-employed:
- Class 2 if your profits are £5,965 or more a year
- Class 4 if your profits are £8,060 or more a year
You work out your profits by deducting your expenses from your self-employed income.
Based on 2016/17 figures you would pay:
Class 2: £2.80 a week
Class 4: 9% on profits between £8,060 and £43,000
2% on profits over £43,000
This is clearly a more affordable option than paying social security contributions in France and this is often the case in other nations too.
2. PORTAGE SALARIAL
Portage salarial is the French term for being employed by an employer of your choice so you can offer your services to a third-party client, maintain your independence and enjoy the considerable benefits of being employed in France. It offers attractive maximum salary retention.
In order to offer portage salarial in France the employing company must be involved exclusively in this activity and must provide a guarantee or caution equivalent to 8%, 9% or 10% of the payroll costs and this is normally secured by a bank or insurance company.
However, this is not a cheap option by any stretch of the imagination. Under portage you must bear both the employer and employee social charges plus fees made by the potage company. Before taxation, you will lose around 50% of your gross income and, from this you must also pay French income tax.
People who are not French tax residents will understandably not find this very attractive solution from a financial point of view.
3. POSTED SOLUTION
For those contractors who are seeking to retain more from their contracting than self-employment or portage can provide, posting can be a good option. This solution involves a non-French employer registered as a foreign employer in France. This employer will take on your social costs wherever they are based trough an A1 certificate which exempts you from social security contributions in France. Income taxes are withheld and paid according to the Double Tax Agreement between France and your country of residence.
Stays shorter than 183 will mean that you usually pay your income taxes back in your country of residence. For longer stays taxes will be due in France from the start of the assignment.
There is an attractive special expatriate tax regime in France where up to 30% of your income can be exempted form charge to French income taxes.
It would not be surprising to achieve a perfectly legal take home pay 30% per cent or better than portage salarial using the posted solution available through Access Financial.
4. PERSONAL SERVICE COMPANY
Working in France via your own personal service company is not the easiest option and there are many complex issues you need to overcome to make a success of it. Corporation tax, for example, is 33% compared with 20% currently in the UK or 12.5% in Ireland. ATA, a sister company of Access Financial, is an expert in localising contractors and their companies in France as well as elsewhere. Done correctly this can be a rewarding way to operate. Done badly it can be a disaster.
It is undeniably complicated as the first thing is to avoid creating a permanent establishment in France. Then you need to register yourself as well as your company in France and register for French VAT if your turnover will exceed the VAT threshold. Your salary will be subject to French tax and social charges unless you can obtain an A1 and stay within your home social security system.
Access Financial is unique amongst international contract management companies in having proven expertise in this field and capacity to deliver. Contractors working in France will find a solution which suits their situation.
5. HYBRID SOLUTION
Our Hybrid Solution is highly popular and attractive for contractors working in France owing to its high degree of flexibility along with our highest retention rate in the country. Employed by one of the companies of Access Financial Group registered in France as a foreign employer, which is an option for EU/EAA nationals working in France, contractors benefit from our local expertise in tax and social security.
What does this mean for you? Complete financial efficiency – you spend less time worrying about the complexities of how you will be taxed, and more time enjoying within 6% of 73% salary retention. To understand the key benefits – such as making France’s Double Taxation Agreements with other countries be of great advantage to you – and what the features of our Hybrid Solution are, then have a look at our quick YouTube video here.
To find out more please see our French Solutions brochure or do contact Nikolas Papageorgiou, Business Development Manager for The Netherlands, Belgium, Luxembourg, French Switzerland & France.
Luxembourg + 352 621677847