Call our Central Nice office on: +33 (0) 4 93 16 95 81
Login French English
Translate this site in to Russian
Search for French Riviera Property
Apartment Villa/House Only New Builds
divider

Abolition French Fiscal Representative from 2015

 

David Anderson Solicitor Advocate, Chartered Tax Adviser and barrister (unregistered) at Sykes Anderson Perry Limited Solicitors and Chartered Tax Advisers in London, England

 

This information has been prepared by Sykes Anderson Perry Limited as a general guide only and does not constitute advice on any specific matter. We strongly recommend that you seek professional advice before taking action. No liability can be accepted by us for any action taken or not taken as a result of any information or advice given or omitted. The information herein does not constitute investment advice. Always consult an IFA if before taking any investment decision.



Non-residents selling French land for more than €150.000 have for many years been obliged to appoint a French fiscal representative (“tax agent”). The tax agents have worked out the non-resident’s capital gains tax (and social charge) bill which is deducted by the notaire on completion. The tax agents have provided a guarantee to the French government that the correct amount of capital gains tax has been paid. The seller has had to pay around 1% of the sale price to the tax agent for this privilege. Many sellers have found this cost excessive especially as it is linked to the sale price and not the gain. You could accordingly end up with a tax agent bill running into tens or hundreds of thousands of euros with a minimal gain.

 

Tax agents

 

The tax agents are nominated by the French government and are effectively tax accountants who agree the French capital gains tax exposure with the French administration so the risks of a claim are extremely small. Competition amongst the small number of tax agents is virtually non-existent. Foreign sellers often do not know about this extra charge until after contracts have been exchanged when the notaire tells them he has to appoint a tax agent.

 

No need for a tax agent from 1st January 2015

 

Concerned about attracting foreign money into France, the French government has announced that from 1st January 2015 there will no longer be a need to appoint a tax agent for residents of other EU countries. The capital gains tax will still have to be paid over by the notaire on completion but without a tax agent’s certificate that the correct amount of capital gains tax is being paid. It seems notaires will have to use the procedures for calculating the capital gains tax themselves which they already do for sales under €150.000. This will involve extra vigilance on the part of sellers to ensure that they get all the deductions they are entitled to as notaires will be likely to take a very conservative approach. This is very good news for the French property market as it removes a cost and some bureaucracy from the sale process.

 

What if I have already sold?

 

This change is being introduced in order to bring France into conformity with European Law. A recent European Court decision states that the requirement to appoint a tax agent restricts freedom of movement within Europe. As France has been contravening European Law, sellers who have suffered this charge in the past should consider bringing a claim against the French government for a refund.

 

Practicalities

 

  • If you are selling it is probably best to complete after 31st December 2014 to avoid paying the tax agent’s fees.
  • Check at the outset your notaire will not charge extra for working out the capital gains tax.
  • Check the tax computation carefully to ensure all lawful deductions have been made.



November 2014

David Anderson Solicitor Advocate, Chartered Tax Adviser and barrister (unregistered)

Sykes Anderson Perry Limited

9 Devonshire Square

London EC2M 4YF

Telephone 020 3178 3770

david.anderson@saplaw.co.uk