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I am a french resident (taxable in France) who has an american

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LLC (single member). Which tax...
I am a french resident (taxable in France) who has an american LLC (single member). Which tax papers do I fill out in France for my taxes in addition to my regular Form 2042?
Submitted: 6 years ago.Category: French Law
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Answered in 20 hours by:
3/17/2011
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago
TKenney, Ph.D.
TKenney, Ph.D., French Attorney (Avocat à la Cour)
Category: French Law
Satisfied Customers: 831
Experience: Practicing law in France, 10+ years of experience on Paris Bar. Taught French Business Law in US
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Depending on your situation : either form 2042 C (cerfa # XXXXX*22 http://www.impots.gouv.fr/portal/dgi/public/popup?docOid=ficheformulaire_3179&typePage=ifi01 ) or form 2047 (cerfa # XXXXX http://vosdroits.service-public.fr/R10243.xhtml ) for income earned abroad.

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Customer reply replied 6 years ago
Hi,
thank you for the answer. Could you elaborate just a little? Which one when? I have made all the income while in France from customers all over the world - is this income earned abroad or, since I am fisically in France, is this income earned in France?
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago

 

You wrote you have an American LLC, so logically I deducted that the earning was made abroad from a company abroad. Then I though, being a resident of France, maybe your company may also be incorporated in France so I suggested 2042 C. The difference between the two is that one (form 2047 (cerfa # XXXXX) is clearly for all earnings made a abroad (salary, business, industry, etc...(and you have to check a box if the earning was made in a country with a tax treaty with France to avoid double taxation) and the other for earning made in France other than as a salaried worker (for example through a company (civil or commercial structure), industries, agriculture, capital gains, professional, independent contractor, etc. I suggest you call the French Tax authority (Centre des Finances Publiques) so that they can look at your situation very closely to define where you income comes from and if you qualify to us 2042 C. So you might have to fill out form 2042 C or form 2047. I sent you the link to the forms to fill out. You should down load them and see which best suits your business practice. Only you wil know which form best suits your business practice.

 

Also being fiscally in France does not mean your income necessarily comes from France. It basically means that you pay income taxes in France and you are subjected to the laws French tax system, etc. You can be fiscally in France and receive your income from abroad.

 

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Customer reply replied 6 years ago
Hi,
thanks for clarification however I am still confused and don't understand which form is the one for my situation.

I am not sure what you mean by "which form best suits your business practice". Do I get to choose which form to fill out based on my feelings or is there a law about it?

I am not sure which info might be helpful for you to help me however I will try to provide some:

The LLC is incorporated in Nevada while the address of the company is in France (so it is an american LLC based in France)
All income is done online from France to customers in Europe and in the USA.

Is my company abroad? Is my income made from abroad?

Thank you very much for your help so far.
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago

 

You wrote you have an American LLC, so logically I deducted that the earnings were made abroad from a company abroad. Then I thought, being a resident of France, maybe your company is also be incorporated in France, so I suggested form 2042 C. The difference between the two forms is that one (form 2047, cerfa # XXXXX) is clearly for all earnings made abroad (salary, business, industries, etc...and you have to check a box if the earnings were made in a country with a tax treaty with France to avoid double taxation) and the other form (form 2042 C) is for earnings made in France other than as a general salaried worker (for example earnings from a company -civil or commercial structure, industries, agriculture, capital gains, professional services, independent contractor, non taxable salary earned abroad, certain specific salaries made in France, etc.

I suggest you call the French Tax authority (Centre des Finances Publiques) nearest you so that they can look at your situation very closely to define where your income comes from and if you qualify to us 2042 C. So, this is why I wrote you might have to fill out form 2042 C or form 2047. I sent you links to the forms. You should down load them both and see which best suits your business practice. A lot of questions need to be asked to determine which one. Only you will know which form best suits your business practice.

 

Also being fiscally in France does not mean your income necessarily comes from France. This basically means that you pay income taxes in France and you are subjected to the laws of the French tax system, etc. You can be fiscally in France and receive your income from abroad.

 

Of, course, you do not get a choice based on your feelings, and there is a law here in France. When I wrote "which form best suits your business practice" this meant that I personally do not have enough information about your business practice to know which of the two you will have to fill out. I gave you the difference between the two forms. You must keep in mind that I am here only top answer your question, not to give you advice. No lawyer would give tax advice without looking at documents and seeing for himself/herself and thoroughly questioning the businees practice of the client. You must keep in mind that Posts on this JustAnswer website are for general information, and are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), and do not establish a professional-client relationship.

 

What do you mean "address in France"? "Address in France" does not mean registered or represented by a company in France. I need to know if your business is registered in France. The expression "an American company based in France" does not mean anything in legal terms in France. I need to know if your business is legally registered in France. These are the same remarks that you will get from the French Tax people. You wrote "All income is done online from France to customers in Europe and in the USA,'" in French law, income is what comes in not what goes out, like out of France and goes to the USA and Europe. Do you mean your income come from the USA and Europe? If your American business is legally registered in France, then you use form 2042 C. Your clients paying you from abroad is not considered as income from abroad. It is considered as payment of your invoices. From the supplementary information you provided, it appears to me that you have to use form 2042 C.

 

Please do not forget to press the green ACCEPT button, otherwise I shall not get any credit for my work. I will be happy to answer any follow-up question you might have.

I suggest you call the French Tax authority (Centre des Finances Publiques) nearest you so that they can look at your situation very closely to define where your income comes from and if you qualify to us 2042 C. So, this is why I wrote you might have to fill out form 2042 C or form 2047. I sent you links to the forms. You should down load them both and see which best suits your business practice. A lot of questions need to be asked to determine which one. Only you will know which form best suits your business practice.

 

Also being fiscally in France does not mean your income necessarily comes from France. This basically means that you pay income taxes in France and you are subjected to the laws of the French tax system, etc. You can be fiscally in France and receive your income from abroad.

 

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Customer reply replied 6 years ago
Hi, thanks for your answer.
The only reason I am asking the quesiton is becuase I am unable to figure out the answer from either looking at the forms. Calling French Tax authority is not an option either for me so this is why I am here, this is why I am asking.

My quesiton is - which form do I need to fill out, not where to obtain the information. I believe my situation is quite simple, sorry if I did not use the right words to describe it. If you do not think you can answer this question it is fine too but please don't send me to French Tax autority or somewhere else, this does not answer my question.

>>> What do you mean "address in France"? "Address in France" does not mean registered or represented by a company in France.
Yes it does not. Address in France is simply what it is, address in France. When I registered my LLC in the USA I had to supply the address of my company. The address of my company is in France.

>> I need to know if your business is registered in France. The expression "an American company based in France" does not mean anything in legal terms in France.
The business, as previousl mentioned, is registered in the USA ("The LLC is incorporated in Nevada").

>> "All income is done online from France to customers in Europe and in the USA,'" in French law, income is what comes in not what goes out, like out of France and goes to the USA and Europe.
What I mean is that there is no nexus in the USA, and all the work is done from France. I do not know if this matters at all, I am just providing additional information. While all the work is done from France my customers come from the USA and Europe.

I hope my complimentary information is more clear now.

Thanks in advance.
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago

From the supplementary information you gave, it appears to me that your business is not established in France (meaning not recognized legally in France as French business nor a foreign business doing business in France). In French law, all businesses must be legally registered and declared, and they must also be registered with your local French Tax Service (Direction Générale Des Finances Publiques). Being established in France gives your business a legal identity, what the French call a "personalité morale." Once established in France, your business will have a main headquarter address (in French called "siege social"), it will have a registration number, it will be ale to open a professional bank account, people will clearly know where to send legal document in case they want to sue you in court, etc.., and your tax status will be very clear (because you will have to chose from a list the different legal types of business to form). This makes everything easy also for tax purposes. You say your business is American, well a foreign business that would like to do business in France but does not have an established head quarter (siege social) in France must have an established business in France representing it (and this is legally registered). This legal representative makes sure that the French taxes are properly filed. This is why I can not tell you which form to fill out. You wrote that seeing a French tax agent is not an option, then you should make an appointment with a French lawyer, because your situation does not appear legal in France and you will have to register your business or be represented. Especially if you are making your customers pay French VAT. The French VAT that you collect must be given to the French Tax Authority. You really have to go to see the French tax agent or go see a lawyer. Your business situation in France must be legal. If you choose not to go see a French tax person or a French lawyer, then what you can do is fill out the supplementary form 2042 C (because as I wrote above, your clients paying you from abroad is not considered as income from abroad, but it is considered as payment of your invoices and your invoices have a French address in the letterhead and your clients pay French VAT), this will show your good faith. However, it will raise a lot of questions to the French Tax people and at the end of the day they will explain to you what you will have to do (basically what I wrote above and including how to send them the VAT you collected).

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Customer reply replied 6 years ago
This makes a lot more sense, thank you. However, I am not sure why you assumed that my invoices have a french address in the letterhead and that my customers pay VAT. There is no VAT for an american company; the whole point of incorporating in NV is not to charge sales tax and not to have to deal with anything. I am not registered for VAT, why would I be collecting any, this is illigal to begin with.

So no, there is no french address in my invoices (i do have an american address), and there is no VAT on my invoices. Please let me know if this changes anythitng.
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago
Is the money from your clients going to an American bank account established in the name of your LLC?
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Customer reply replied 6 years ago
Hi,
the money is going to
a) my business PayPal account (company name)
b) my business account in the USA (company name)
c) my private account in France (family name)

Hope this helps.
Barrister: TKenney, Ph.D., French Attorney (Avocat à la Cour) replied 6 years ago
This last information you gave (a,b and c) is very important. You therefore have to fill out form 2047 (cerfa # XXXXX). Please do not forget to press the green ACCEPT button, otherwise I shall not get any credit for my work. I will be happy to answer any follow-up question you might have afterwards.
TKenney, Ph.D.
TKenney, Ph.D., French Attorney (Avocat à la Cour)
Category: French Law
Satisfied Customers: 831
Experience: Practicing law in France, 10+ years of experience on Paris Bar. Taught French Business Law in US
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Customer reply replied 6 years ago
Thank you very much for your help.
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