FOCUS ON THE COUNCIL OF STATE RULING OF 20 MARCH 2023, WHICH REITERATES THE LEGAL VALUE OF BILATERAL TAX TREATIES UNDER FRENCH DOMESTIC LAW & WHICH SHOULD REASSURE NON-RESIDENT FRENCH EXPATRIATES OR FUTURE EXPATRIATES

Council of State

When you are considered a French tax resident, you are required to report all your income to the French tax authorities, regardless of where you earned it. So, if you receive income from abroad, you are obliged to declare this income to the French tax authorities.

If you do so, you may be subject to double taxation. The double taxation mechanism means that French tax residents are taxed twice. Income could therefore be taxed in two countries at the same time. This situation arises when an individual or a company is located in two different countries that have not signed a tax treaty with each other.

In this case, a treaty between the government of the French Republic and the government of the United Arab Emirates (“UAE“) for the avoidance of double taxation was signed on 19 July 1989 and amended by an addendum dated 6 December 1993 (the “France-Emirates Tax Treaty“).

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THE EXIT TAX OR WHEN FRENCH EXPATRIATES FROM THE EMIRATES ARE IN THE SIGHTS OF THE FRENCH TAX AUTHORITIES

Exit Tax picture

Germany announced last February that it had purchased tax data on millions of people living in Dubai.

Questioned by Les Echos,the Directorate General of Public Finance confirmed that the sharing of this data with the French tax authorities has already taken place.

The French authorities are therefore now seeking to get their hands on possible fraudsters in these data and the presence of “undeclared income” and “unknown possessions” of people wishing to escape taxation in their country. In particular, the aim is to verify whether French entrepreneurs who have gone to Dubai have paid the “exit tax” which affects unrealised capital gains realised in France and abroad (1).

This article will retrace the contours of the concept of exit tax in order to inform French expatriates residing in Dubai on their compliance or not with French tax law due to their change of tax residence from France to the Emirates.

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HOW TO BECOME A STUDENT IN CANADA ?

Canada is one of the most sought-after countries for immigration, for several reasons: universal health, employment opportunities, cultural and religious diversity.

In addition, Canada is internationally recognized for its high-quality education system and welcomes many international students every year. However, to study in Canada, it is essential to obtain a study permit. The purpose of this article is to provide an overview of the step-by-step procedure to obtain a study permit in Canada and to become a student in Canada, taking into account the specificities concerning Quebec and briefly explaining how the Canadian educational system works.

Etudiant CanadaWe will first briefly present the Canadian study system in order to have a better understanding of the different procedures (I).

Then, we will approach the procedure to follow concerning the study permit at the federal level outside Quebec (II).

Finally, we will explain the specific procedures to follow to obtain a study permit in the province of Quebec (III).

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FOCUS ON THE TAX TREATY BETWEEN FRANCE AND CANADA & ITS IMPACTS FOR FRENCH INDIVIDUALS RESIDING IN CANADA

The Tax Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income between the Government of France and the Government of Canada was signed on 2 May 1975 and amended in 1987, 1995 and 2010 (the "Convention"). [1] 

The objectives of this Convention are manifold.First, the two countries want to promote their economic relations and cooperation in tax matters.In addition, they wish to eliminate double taxation in respect of certain taxes expressly covered by the Convention.

However, the Convention has provided a safeguard: the set-up or strategies put in place by taxpayers, whether natural or legal persons, must not have the sole purpose of obtaining tax relief provided for by the Convention.

The French and Canadian taxes concerned by the Convention are limited to:

  • income tax, including in the case of a sale of immovable property;
  • corporate tax registered in France or Canada; and
  • tax on transfer duties free of charge (only in the case of France).

This article will help you better understand the tax impacts of your income between the two countries if you are an individual. If you are a company, we have also written an article to guide you. 

 

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IMPATRIATION OR WHEN A FRENCH CITIZEN GOES BACK TO FRANCE

Impatriation is a tax regime that was created for the benefit of French citizens who are tax residents abroad and also called “expats” who want to return to France permanently. 

This status aims to encourage French citizens to return to live in France after their expatriation.

Thus, an impatriate will be able to avoid paying French taxes when returning to France by benefiting from an exemption on certain sources of French and foreign income.

In this article, we will go over this impatriation regime point by point.

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