Contract in France

[tcon]

Thanks BlasterBates , I guess I will have to get professional advice and detailed tax simulation.

[BlasterBates]

Thanks everyone for your replies, I am still a bit confused.
@BlasterBates
Would splitting the contract involve setting up two limited companies - one in the UK and one in France? How this is done in practice?
Also, this contract would involve trips to other countries mainly within Europe but some may be out of EU (for testing, inspection of production facilities etc.) most will be one or two-day trips but some may be for two/three weeks. I suspect it will not be subject to taxation in each jurisdiction from day one – this wouldn’t be practical!? Are there any rules how many days in the country are considered “work” and how many would be a “business trip”- to me it is a bit subjective, I don’t see a huge difference between the two.
@TheCyclingProgrammer
Re.: IR35. If I understand, since April it is the contractor’s client to determine the IR35 status of the contractor. I suspect the French client may not understand UK rules and/or may not care much about them; to the French client I would be just another B2B service provider. Would it in this case be down to me to determine my IR35 status based on the nature of the contract and services – similarly as it was for most UK contractors before April?
Re.: Income taxable in France. How would “income” be defined in this case. If I pay myself salary and dividends (as it is often the case for limited company contractors) would salary earned in both jurisdictions be taxable in both countries while dividends payed by UK company be taxable in the UK?
@all
Would anyone on the forum know an accountant proficient in tax rules in both jurisdictions, ideally with experience in similar cases, who can suggest the best and tax efficient way to set it up (without breaching any tax rules). @BlasterBates is Sue at IPAYE such an accountant?

The client is based in France therefore when you visit another country you wouldn't be subject to taxation for a period of up to 6 months because of this fact. This rule doesn't apply when you work directly for a client in another country. If your client had been based in the UK and would have sent you to work in France for another company you would have been able to have worked for 6 months without registering for tax in France. This rule however does not generally apply when you work through an agency. In very simply understandable terms you are taxed where there is an invoice for your personal service. When the French company sends you to work in Hungary to test their product, they will not charge you out on an hourly rate. There will be no invoice as they pay for you. If they do by the way, then it would indeed be taxable there too. Every country where there is an invoice with your name on it is a "taxable event". No invoice no taxation. That isn't the legal term, but that is in effect what the international tax law states. The other thing to bear in mind is if you spend a few days in one country you would never earn enough to exceed the tax threshold so even if it was theoretically taxable it there would be no tax to pay. Only in France do you need to consider registering for tax as your tax liability there would be sufficiently high for the authorities to chase you. A Hungarian tax official isn't going to investigate an invoice for £300.

The best way would be to go through a payroll company and let them sort out legalities, they may indeed set you up as self-employed in France. Sue at IPAYE is someone who works for a company that does what you need.

If you can arrange the work so you only spend a few days a month in France only for meetings then probably could just tax yourself in the UK.

[tcon]

Thanks everyone for your replies, I am still a bit confused.
@BlasterBates
Would splitting the contract involve setting up two limited companies - one in the UK and one in France? How this is done in practice?
Also, this contract would involve trips to other countries mainly within Europe but some may be out of EU (for testing, inspection of production facilities etc.) most will be one or two-day trips but some may be for two/three weeks. I suspect it will not be subject to taxation in each jurisdiction from day one – this wouldn’t be practical!? Are there any rules how many days in the country are considered “work” and how many would be a “business trip”- to me it is a bit subjective, I don’t see a huge difference between the two.
@TheCyclingProgrammer
Re.: IR35. If I understand, since April it is the contractor’s client to determine the IR35 status of the contractor. I suspect the French client may not understand UK rules and/or may not care much about them; to the French client I would be just another B2B service provider. Would it in this case be down to me to determine my IR35 status based on the nature of the contract and services – similarly as it was for most UK contractors before April?
Re.: Income taxable in France. How would “income” be defined in this case. If I pay myself salary and dividends (as it is often the case for limited company contractors) would salary earned in both jurisdictions be taxable in both countries while dividends payed by UK company be taxable in the UK?
@all
Would anyone on the forum know an accountant proficient in tax rules in both jurisdictions, ideally with experience in similar cases, who can suggest the best and tax efficient way to set it up (without breaching any tax rules). @BlasterBates is Sue at IPAYE such an accountant?

[BlasterBates]

Work done in France is taxable in France. If you want the contract to be taxed in the UK then you need to work on it exclusively in the UK. You can visit the client for meetings, as long as you don't do the work there.

You should consider splitting the contract, proportional to the amount of time you spend in each country. This is quite normal and easy to do. It is the right way to do it and doesn't have any disadvantages in how much tax you pay.

I would suggest you contact Sue at IPAYE https://www.contractoruk.com/forums/...ief-guide.html

[TheCyclingProgrammer]

The contract would involve working partially from home and partially from the Client’s office in Paris. The recruitment agent suggested that as long as I don’t work in France more than 183 days a year (which will be the case) I would not be subject to French tax. Is that correct?

No. You're taxable on any income earned whilst working in France from day one. The 183 day rule relates to tax residency which only determines where you're taxed on your worldwide income. You will remain tax resident in the UK if you're only working in France occasionally.

The agent further suggested that because the client is out of UK the contract is by default out of IR35, is that right or are there any other conditions?

Also wrong. Having a client outside the UK makes it harder for HMRC to perform an IR35 investigation but not impossible and certainly doesn't move any contract you have outside the scope of IR35 automatically.

[NotAllThere]

A good starting point is to assume everything the agency told you is incorrect. For French tax, try to find a forum for Brits living in France and ask there. You'll need a French accountant anyway.

If you have citizenship of another EU country, then Brexit shouldn't be an issue.

[tcon]

Dear All,
I am new to this forum and would like to get some advice on the prospective contract in France.

I have been recently contacted by an agent about the prospect to work on the contract in France. The contract itself looks very interesting and attractive but I am not clear about the cross-border tax arrangements and possible complications with Brexit and IR35.

The contract would involve working partially from home and partially from the Client’s office in Paris. The recruitment agent suggested that as long as I don’t work in France more than 183 days a year (which will be the case) I would not be subject to French tax. Is that correct?

The agent further suggested that because the client is out of UK the contract is by default out of IR35, is that right or are there any other conditions?

Finally, is any of the above going to be somehow impacted by Brexit (the contract is expected to run for 18 – 24 months)? I have dual UK and EU nationality so I shouldn’t have issues with working visas if but is there anything else to consider.

Clearly, I will discuss all the above with the accountant before (if) I actually sign the contract but I would appreciate any views and comments – what do I need to ask accountant about (I have to find one first).