Contractors’ Questions: Can I stay freelance for a contract in France?

Contractor’s Question: Can I use my UK freelancer status if I work in France for French employers (for just over six months), and, if so, does French taxation apply? I don’t really want to be taxed twice!

Expert’s Answer: As a freelance worker, the moment you move to and start a contract in France, your centre of interest and management moves to France. This means you are liable for tax on locally sourced income from day one of your contract.  On this basis, your taxes should be paid from day one of your contract in France.

France also recognises the ‘freelance status’ you refer to, so you will be able to register under this status and operate in the same way as a normal freelancer.

Note, though, that this will require you to have a fixed address in France which is not a hotel (if this is an issue, I’d advise speaking to a local compliance expert or accountant to have a temporary registered business address in France). You will also be required to complete a ‘DECLARATION DE DEBUT D’ACTIVITE’ form, which is sent to URSSAF, the organisation responsible for the registration of self-employed workers. This whole process takes approximately five weeks, so make sure you take action as soon as possible.

I’d also recommend that you join the ‘Centres de Gestion Agréés’ (CGA). The advantage is that if you use a CGA then you are granted some relief on your taxation liability and your tax estimation is calculated in a more accurate way to prevent overpayment and the administrative headache this can lead to.

If your contract is for three months or less, it may be difficult for you to complete registration in France and arrange for your taxes to be paid locally, which would mean continuing to pay taxes in your home country.  However, if your contract is for more than three months (which you indicate), or there is a possibility your contract will extend beyond three months, you should initiate local registration immediately. 

With regard to paying tax twice, if you pay taxes in France, you will receive evidence of tax payment from the French authorities and when you return to the UK, you can advise HMRC that taxes have been paid in France. Under the double taxation agreement, the taxes you have paid in France will be offset against your UK tax liability.

Lastly, please be aware it is important to ensure you are working under the correct structure in any new country to avoid any fines or penalties being enforced by the local authorities.  We would recommend you speak with a compliance expert or French accountant so they can guide you through the process and requirements for working in France. Bonne chance!

The expert was Michelle Reilly, the chief executive of overseas tax and compliance advisory 6CATS.