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


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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CRYPTOCURRENCY AND TAXATION – COMPARATIVE STUDY FRANCE, UNITED ARAB EMIRATES & CANADA

Cryptocurrencies appeared in the digital world a decade ago and are now experiencing significant growth and democratization. 

As virtual means of payment that can be used mainly on the Internet, relying on cryptography to secure transactions and the creation of units, and escaping any control from regulators and central banks exists today more, there are today more than 4000 crypto-currencies in circulation. 

Nevertheless, their legal framework is sometimes confusing and difficult to understand. This article will thus aim to study the legislative framework of cryptocurrencies in France, Canada and the United Arab Emirates, but also their tax regime. We will then examine, in a non-exhaustive way, the Initial Coins Offerings, a new phenomenon of fundraising based on cryptocurrencies. 

What are cryptos in practice ? 

A cryptocurrency is a virtual means of payment that relies on cryptography to secure transactions and the creation of units, and that is beyond the control of regulators and central banks. Cryptocurrencies are therefore based on a computer protocol of encrypted and decentralized transactions, called blockchain. 

The best known cryptocurrency is bitcoin, which is a virtual unit of account stored on electronic media. Nevertheless, today there are more than 4000 cryptocurrencies in circulation in the world, the best known outside of bitcoin being for example Ethereum, Ripple or EOS, XRP, Tether, Cardan, Stellar, Chainlink, Uniswap, Polkado or USD Coin.

Cryptocurrencies are part of the broader framework of cryopoassets,which represent “virtual assets stored on an electronic medium allowing a community of users accepting them in payment to carry out transactions without having to resort to legal tender”. 


The issuance and circulation of digital cryptoassets is particularly related to Initial Coins Offerings(“ICOs”). Unlike a stock exchange issue (IPO), the ICO is financed on digital media called tokens. The ICO thus represents a fundraising operation operating through the issuance of digital assets exchangeable for cryptocurrencies during the start-up phase of a start-up or a business project. 

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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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