French employment income on UK tax return.

French employment income on UK tax return.

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I have a client who was employed in France for less than a year. They have been told by the French tax authority that they are not liable for French income tax as the income should be included on their UK tax return and taxed here. This is fine by me. The question I have, is what income figure to use? The client thinks that the figure to use is after the French 'social' taxes, but I cannot find any guidance on this. Has anybody had any experience with this?

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By thisistibi
17th Nov 2011 15:40

Gross

You should tax the gross income in the UK, and consider whether double tax relief is available for the French taxes which have been paid. 

The UK/France double tax treaty lists the "contributions sociales généralisées" and the "contributions pour le remboursement de la dette sociale" as creditable taxes.  So you will probably need to find out precisely what 'social' taxes are involved.

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By godwinsj.hotmail.com
17th Nov 2011 16:59

Confusion

I am not 100% convinced the French tax office is correct, this is extract from DTA

 

INCOME FROM EMPLOYMENT
1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless
the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State
.

 

The reason he thinks he should be taxed after deduction of social charges is because thats how the French calculate the taxable figure

 

 

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By David Smith
18th Nov 2011 16:49

According to DT7252, 

According to DT7252, “contributions sociales généralisées” and “contributions pour le remboursement de la dette sociale” are inadmissible for credit under the treaty.

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Replying to quranschool29:
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By thisistibi
18th Nov 2011 17:59

Oops

David Smith wrote:

According to DT7252, “contributions sociales généralisées” and “contributions pour le remboursement de la dette sociale” are inadmissible for credit under the treaty.

You are right, sorry my fault - I referred to the actual treaty, which lists all those taxes as covered by the agreement; and then sneaks in at Article 24 that those two are in fact not admissible!

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By k40911
19th Oct 2013 13:09

Social taxes are known as NIC

mm

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