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The Carte de Sejour
If you intend on buying property in France, living in France permanently or to stay for more than three months at a time,
theoretically you need a residence permit - a carte de sejour. These are issued by the prefecture
of your department. You can often go through your local mairie or gendarmerie but in the long run,
it is probably simpler to go direct to the prefecture who will give you a list (and it is a long one) of
the documents you will need.
Dealing with French bureaucracy is no different from dealing with most beaureaucracies.
(except often the language can be a problem). It can feel like wading through treacle.
However if you are a citizen of the European Community you are entitled to live and
work in France, provided you meet certain requirements which ensure that you won't be a
burden on the state. You must have a permanent home, either owned or rented; you must
have a job, business or independent means of support and you must also have medical
insurance through contributions to the French national health service or private medical cover
(not unreasonable really!)
Detailed requirements for the carte de sejour can vary from prefecture
to prefecture, depending on the interpretation of the rules. For
example, some prefectures may insist on an official translation
of documents like birth certificates.
Leaving aside local variations,
the documents you will definitely need are;
- A valid passport
- 3 passport sized photographs
- Birth and marriage certificates
- Certificate de domicile (you get this from your mairie)
- Proof of permanent address (for this you need an abstract from the Acte de Vente for your property
from the Notaire or a rent receipt)
- Justification de Domicile (A gas or electricity bill which shows that you are a householder)
- Proof of income (If you are employed, you just produce your contract of employment. If you are
self-employed, you must show proof that you are in business. To get this you have to register with the
trade or professional organisation, such as the Chamber of Commerce or the Chambre de Metiers,
which deals with your particular occupation. The prefecture will tell you who to contact. Your trade
organisation will arrange for you to sign on with the various health and social security bodies.
When you have done this, you will receive your final registration document which you then
take back to the prefecture.
If you are retired or not working, you must show that you have enough
money to live on. You will need:
- Proof of your entitlement to a pension and/or an attestation
from your French bank that you have income or capital resources.
- Evidence of Medical Insurance (If you are employed, you will
automatically have a social security number.
If you are self-employed, your Inscription Definitive will
show that you are contributing to a Caisse Primaire d'Assurance
Maladie.
If you are over UK retirement age, your contributions to
the UK system entitle you to health benefits under the French system.
To prove your entitlement you should:
- get form E121 from the DSS in Newcastle.
If you are not working and not retired, you need:
- Proof that you belong to a recognised private health insurance
scheme. Timbre Fiscal for the fee. - this is obtained from any
tabac, not from the Post Office as you might expect. The prefecture
will tell you the current fee.
It may take two or three visits to the prefecture before they are satisfied that they have all the
information they want. You need photocopies of all documents, including the relevant pages
of your passport.
One last point, before you go to the prefecture, phone first to
check the opening times of the Carte de Sejour office. They
often don't keep normal office hours and it is infuriating to travel
100 kilometres to find that they have just shut for the day - and,
oh yes, take a good book!
Once your application is accepted, you will be given a temporary carte de sejour, called a recipice,
followed by a permanent one several weeks later. You may be asked to collect both of these from
your mairie, You should carry your carte de sejour with you at all times.
The carte de sejour normally has to be renewed every five
years if you are retired and ten years if you are working.
Health and Social Security
The big difference between the British and French systems is that
the administration of social security in France is carried out by
autonomous bodies called 'caisses', each of which handles
a different aspect of social security, such as pensions, health
insurance and family allowances. To complicate matters, there are
also different 'caisses' for different classes of occupation.
If you are working in France, as an employee or self employed, you must register with the social
security organisations which cover your particular occupation and pay contributions called 'cotisations'.
If you are employed It is your employer's responsibility to register
you with the various caisses. You will be issued with a registration
card, which you guard carefully. If you change jobs you must produce
it for your new employer. As in the UK, your employer pays his contributions
and yours direct to the caisses and deducts your contribution from
your salary. How much you pay depends on how much you earn but,
as a guideline, the basic employee's cotisation in 1999 was just
over 21% of gross salary. If you have children, you may be entitled
to Family Allowance. Tell your employer and he will get the Caisse
d'Allocation Familiale to contact you. Health insurance is provided
through the Caisse d'Assurance Maladie. The difference between
French and British health provision is the French national insurance
does not cover the full cost of treatment, so you may want to take
out private complementary insurance through a 'mutuelle'.
Indeed you may be compelled by your contract of employment to join
one.
If you are self employed If you are working for yourself, the
basic procedure is the same but it's down to you to get yourself
into the system. To add to the challenge, not only is there a different
set of caisses for the self employed but different caisses
for different professional and occupational groups. It is your responsibility
to register with the appropriate organisations. When you register
as a self employed person at the Chambre de Commerce or trade
organisation (which you will have to do to get a carte de sejour),
they will tell you which bodies to contact. Cotisations are based
on your previous year's income. If you are starting a business in
France, you may be able to get a reduction on some of them for the
first year, but to qualify you must notify the Direction Departementale
de Travail et de l'Emploi when you register the business. When
you plan your budget, remember that most of the cotisation demands
come in January and February. They usually have to be paid almost
immediately and there are fines for late payment.
If you are not working You are not currently entitled to any benefits,
even health cover. Your UK payments will generally only cover you
for up to two years, so you must take out health insurance. In point
of fact, you will not get a carte de sejour without it. You
can choose to pay voluntary contributions into the French system
or there are a number of UK, French and international insurance
schemes available. However, a change in the law as from Jan 1st
2000 gave the right to all 'stable residents' of France to join
the French health system. Benefits will be free for low income families,
but will involve a revised contribution system for others, based
on your income. The contribution has been set at 8% of your taxable
income over and above an allowance of 42,000ff. If you are a couple
your combined income is taken into account but you are obviously
both eligible for the basic cover allowed to French nationals. Furthermore,
you may be entitled to 'Couverture Malade Universelle', or
100% cover of all expenses, free of charge if your combined income
is below set low income thresholds. These have been set at 42,000ff
for a single person and 63,000ff for a couple with extra allownaces
for children. If you are in possession of European qualification
papers (E106, E121) allowing you free access to basic cover, these
will still over-ride the requirement for contribution.
If you have a UK retirement pension You are entitled to the benefits
of the French health service without paying contributions. Ask for
form E121 from the DSS Overseas Branch, Newcastle on Tyne, NE98
1YX and send it to the Caisse Primaire d'Assurance Maladie
for your area, who will probably ask you for copies of things like
your birth certificate before issuing you with a registration card.
Using the health service Unlike the UK you don't register with
a particular doctor but can use anyone who suits you. Before making
an appointment with a doctor or dentist or going into hospital,
check that they are 'conventionne'. This means that their
charges are within the limits set by the health service. If you
use a non-conventionne doctor or hospital you may have to
pay a lot extra over the health service limits.
Briefly, this is how the system works. Visits to doctors, medical
or dental treatment or prescriptions (ordonnance) bought
from a chemist are recorded on a brown and white form called a feuille
de soins. You pay the doctor or chemist direct, then send off
the feuille de soins (keeping a photocopy) to the address
on your medical registration card. You can get a refund of 10% to
70% of the cost on the depending on the treatment but the maximum
refund is steadily being reduced making complementary insurance
more important. The cost of hospital treatment for serious illness
is refunded in full, but you pay a daily charge for accommodation!
The Tax System
Whether you live in France or have a second home here, you are
bound to become involved with the French tax system. At the very
least you will pay local taxes (like the old British rates system)
and if you own any property in France it will be subject to French
inheritance tax. If you live here for more than 183 days a year,
all your income and assets worldwide are potentially liable to French
tax. In theory, you may also be liable for UK tax. In practice,
there is a double tax treaty between France and the UK which protects
you from paying twice. On the positive side, a move to France gives
you a window of opportunity to do some effective tax and investment
planning.
In this summary we can only outline the main taxes that may affect
you. Before you buy property, invest capital, arrange pension payments
or plan your estate, you must get professional advice from experts
who know the French system.
Local Taxes
There are two kinds of local tax, both based on the notional letting
value of the property. The Taxe Fonciere is paid by the owner.
The Taxe d'Habitation is paid by the occupier, regardless
of whether they are owners or tenants. The amount varies from commune
to commune. If you are retired you may get a reduction or be exempt.
Direct Taxes
The French system is complicated and it is not easy to get help
from the tax authorities. All taxation is through self-assessment.
This makes it all the more important that, unless your affairs are
very straightforward, you get professional advice. When you move
to France, it is your responsibility to register with the local
Inspector des Impots. You are taxed as a family unit, with
each partner being considered to earn an equal share of the household
income. The tax year runs from January 1st to December 31st. Early
in January you will be sent a tax return, the Delcaration des
Revenus, which must be returned by the end of February. There
may be a penalty for late returns and there is always a levy for
late payment. Tax is not deducted by PAYE but paid in the year following
the year of earning the income, either in three instalments in February,
May and September or in 10 monthly instalments.
Personal Income Tax
There are two sorts of income tax.
- Earned income tax for salaries and pensions is Impot
sur le Revenu des Personnes Physiques(IRPP). The tax bands
range from 10.5% to 54% (1999 figures) depending on your income
- but do not despair, there are a large number of allowances.
Unless you have a large income, you will probably not pay more
than in the UK and you may well pay less as a couple.
- Unearned income
tax is Impot sur les Revenus de Capitaux and includes all interest,
investment and property income. There is also Wealth tax, Impot
de Solidarite sur la Fortune on net assets over 4.7 million ff (1999
figures).
Capital gains tax
This is called Impot sur les Plus-Values. You may be taxed
on capital gains realised on property or investments anywhere in
the world. There is no tax on any gain you make in selling your
principal home. There is a small tax free allowance for sale of
shares. Capital gains on sale of shares are taxed at a flat rate
of 16% (1999 figures). Most other capital gains are just added to
your taxable income.
Social Charges
All sources of income and capital gains are subject to the Contribution
Sociale Generalisee (CSG) and the Contribution au Remboursement
de la Sociale (CRDS). These are basically social security levies.
They amount to 8% of earned income and 10% of most investment income
and capital gains (1999 figures).
If you plan ahead, preferably before you move to France, you can legitmately put many of your
investments out of reach of the French tax people.
Inheritance and gift tax
The Droits de Succession which not only cover death duties
and lifetime transfers but dictates who inherits your assets, probably
cause more anxiety to British residents than any other problem.
Theoretically, if you live in France, droits de succession
are paid on all your property and assets worldwide. The level of
tax paid by your heirs, including your spouse ranges from 5% to
60% (1999 figures) depending on the value of your estate and how
closely they are related to you. Again, good financial planning
can help to ensure that as much as possible goes to the people you
want and as little as possible in tax.
The Banking System
French banking has a completely different culture from UK high
street banks and operates to strict rules. As a result, it can be
a disaster area even for fluent French speakers. For instance, writing
a cheque on an overdrawn account (a cheque en bois) is officially
illegal. So is post dating a cheque. Worse, if a cheque bounces
because you were out of the country and the funds you sent over
had not arrived, you will be immediately blacklisted by the Bank
of France. If the situation is not sorted out within a month or
the cheque bounces a second time, you can be fined and banned from
owning a cheque book for ten years.
Choosing a bank
The basic criteria for choosing a bank is the same whichever country
you are in. These include ease of access, the charges and the banks
willingness to supply any loans or mortgages you may need. For the
expatriate there are more specific criteria. First is the ease and
cost of international transfer. To avoid delays and extra charges,
your French bank should always be a 'correspondent' of your UK bank.
Some British banks now operate special agreements for swifter transfers
to specific banks. Ease of access is less important. The French
Carte Bleue system means that you can withdraw money from
any cash machine anywhere in France. Ease of communication is obviously
important. Many young bank employees have a relatively good knowledge
of English. However, if you are going to have a good understanding
of each other, you need a banker who is willing to understand another
culture. Some banks have specialist departments for expatriates.
The Compte Courant is a normal cheque account in sole or
joint names, on which you can also have a Carte Bleue debit
card. To open the account, you need proof of your address, like
an electricity bill and a 'piece d'identite' such as a carte
de sejour or a passport. By signing the application form, you
are, in effect, confirming that you understand French banking law.
So don't hesitate to ask questions. The biggest source of misunderstanding
is the French value dating system, which means the value they give
you on any one day is rarely the 'real' balance used to calculate
overdraft interest. Unless you understand how value dating works,
you could end up paying unnecessary interest. Say you are transferring
money from the UK to pay your builder - you phone your bank, who
confirm that the transfer has arrived so you give a cheque to your
builder who takes it straight to his bank in the same town. Your
bank will receive this cheque the next day for payment. However,
your bank will consider that they received the transfer one day
later (jour + 1) and that the cheque was received for payment
two days before (jour - 2). In 'value dating' terms, you
may have been overdrawn for two days and may be charged interest
at the end of the month. What makes it more confusing is that your
bank statement will not show you as overdrawn.
The Carte Bleue is a debit card system like Switch but
you use a PIN (personal identity number) rather than a signature
for all transactions. With your Carte Bleue, you can withdraw
money from any bank's cash machine anywhere in France and, with
most cards, throughout the world. You can pay most supermarket,
restaurant or other bills with your card. There are three types
of card: the CB Nationale, which can only be used in France,
the CB Internationale, which is linked either to the Visa
or Mastercard systems and can be used in France or abroad and the
CB Premier which is like a gold card with higher limits and
added benefits. There is an annual fee for each card. When you use
your card, your bank account is automatically debited. Cash withdrawals
on your card are always debited immediately. With other transactions
you have a choice between 'debit immediat' and 'debit
differe'. Debit immediat is self-explanatory. With debit differe,
the month's transactions are debited in a lump sum at the end of
the month.
Deposit accounts
All banks have an instant access compte sur livret which
pays taxable interest. There are also several types of tax free
accounts, but there is a limit to how much money you can save in
them. These are the Livret A, available only from the Caisse
d'Eparagne or the Post Office and the Codevi, available
from all banks. The Livret Jeunes, also available from all
banks is available for anyone aged 12-25. The Livret d'Eparagne
Populaire is for non-taxpayers.
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finance
