The French in the United States and the problem of double taxation (Fr)
International double taxation of income or property has its origin in the full fiscal sovereignty of the States, each of which has full discretion to exercise their right to tax,
- one because it considers itself the state of residence of the income recipient and
- the other because he believes that this income has its source in his territory.
Such a situation can arise schematically in the following two cases. A person is a tax resident of France and a US tax resident if:
- she has a Green Card or
- she spends more than 183 days on American territory.
Likewise, a person who is a resident of a state and receives income from another state risks being taxed in the state of the source because the income arises in this territory and in the state of the residence because the beneficiary is domiciled there.
II. The tax treaty in France of August 31, 1994
The object of the tax treaty of August 31, 1994 in matters of personal and corporate income tax is to avoid double taxation in France and the United States.
The convention provides that a person cannot be simultaneously a tax resident of France and the United States.
She is considered a resident of the state with which her personal and economic ties are closest.
- people domiciled in France are subject to tax on all their income (from French or foreign sources),
- people whose tax domicile is located in the United States are subject to tax in France on their income from French sources only.
With regard to the provisions of the agreement, the following are considered to be tax residents of France:
- people who have their main home or place of residence in France,
- those who exercise a paid or self-employed professional activity in France,
- those who have the center of their economic interests in France or,
- state agents who exercise their functions
- State agents who exercise their functions entrusted with missions in a foreign country and not subject in this country to a personal tax on all their income)
Thus, this convention encourages French investments in the United States by granting nationals of the two states a more favorable regime than that to which nationals of third countries are subject.