Attitude of the French tax system about getting paid on a foreign account
Thread poster: Laure Trads

Laure Trads  Identity Verified
France
Local time: 17:38
Member (2004)
English to French
May 20, 2005

Hi,

I read in these forums that lots of you are transferring money from abroad and I would like to know your experience.

I used to live and work in the UK. I have recently moved to France.

95% of my customers being in the UK and paying me in Sterling pounds, I have kept my UK bank account, so that I can accept bank transfers and cheques in Sterling pounds. This is because I don't want my customers to have to pay a fee in order to pay me in euros. Also, I still have a few expenses in the UK, such as a mortgage, and I would find odd and expensive to transfer money to France to transfer it back to the UK.

I am currently attending a 5 week course on holding one's accounts in France. I explained the above to one of the accountants who said that getting paid on a foreign account made me suspicious in the eyes of the French tax system: they might think I am trying to evade tax, even though I have all my UK bank statements and can prove every single amount. He recommended opening an account in Sterling pounds with a UK bank in France, like Barclays.

Apparently, once you look suspicious in the eyes of the French tax system, they get on your case and you are more likely to be checked.

This brings me to the following questions:
Is that accountant just being over cautious?
Have you had similar warnings or have you been paid on a foreign account for years without ever worrying about it?
Have you opened in France an account in a different currency: are the fees reasonable?

I would be grateful for your experience.
Thank you,
Laure
(I am also posting this on the French forum)

[Edited at 2005-05-20 09:29]


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Christopher RH
Local time: 17:38
French to English
Association Agréée? May 20, 2005

If you want to benefit from the 20% "association agréée" tax deduction, you'll need to have all payments transit a "professional-only" account anyway.
I expect that your Association Agréée's thoughts on the matter will depend on their good will: they may accept your UK account as being "professional" or they may not. The accountant's reserves here suggest they may dislike the idea.
Also, if you use you UK account for non-professional purposes, this could cause more serious difficulties with the Association Agréée.


Unfortunately, I can't actually answer your questions since I insist on euro payments, all charges paid, to my French account. To be honest, I think this works out cheaper than accepting the charges yourself since the charges here can be abusive, depending on which bank you use.

"Shopping around" is not a notion French banks seem to have understood yet, but you should try anyway. You might find some branches unable to deal with the situation if you say you are "thinking about" opening an account and would like some information. However, those same banks might be cheaper in dealing your UK customers (a few years ago, my comparison of charges applied by the local BNP, CIC and CCF gave a result which was inversely proportional to the warmth of their reception when I went to ask about them...).

Finally, for Barclays, the situation ten years ago (last time I talked to them) was that Barclays France was wholly independent and transfers from Barclays UK to Barclays France were NOT treated as internal transfers. This might have changed but is worth checking up on.


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Laure Trads  Identity Verified
France
Local time: 17:38
Member (2004)
English to French
TOPIC STARTER
Thank you Christopher May 25, 2005

Thank you very much for sharing your experience with me.

As you say, the main issue seems to be that my UK account is a mixed account. After speaking with another accountant, I have opted for an intermediary solution: opening another account in the UK which will be professional only. This way, I can carry on paying my mortgage there without tranferring money forwards and back.

Thanks again,
Laure


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