I plan to move permanently to France and have some questions about my company structure. I am looking for the simplest solution so I can focus on my business activities.
I own 100% of the shares in a corporation located in another EU country, where I am the sole manager and employee. The company has been active for just over 10 years. None of the company’s income is or will be coming from France, there are no French customers.
There is a real company address and office in the other EU country, where some administrative tasks, including all bookkeeping, are done by a consultant, and half of the board members (1) are also located at the same address.
I will be working from my home in France.
I have learned that I could easily register the company in France to file and pay social fees + salary tax, so I plan to do this.
Before going ahead and creating and registering everything to withhold and pay social security and taxes, I want to double-check that everything will be okay from the French side of things.
1. Paying out a salary to myself living in France as a sole owner, could this lead to implications with French authorities with them trying to tax my foreign Corporation in France?
It is of course already taxed in the other EU country, so my question is if Article 209 I would make French authorities try to tax the company in France instead. In this case, I guess the tax treaty would have to give final guidance.
2. If I resign completely as managing director/ employee, only being the sole shareholder taking out dividends, could this be a solution?
3. In my case, would my work from my home office in France fall under “carry out transactions that are part of a complete business cycle”?
Thank you in advance for your guidance.
Official citation of Article 209 I
The concept of “place of operation”, within the meaning of Article 209 I of the French General Tax Code, includes the customary exercise of a business activity that is:
Subject to the provisions of international agreements, foreign companies are liable for taxes in France if:
• Without owning an establishment in France, they make use of representatives that do not have a professional status separate from theirs. These intermediaries are considered to be genuine agents carrying out a business activity in France on behalf of the foreign company
• Without having either an establishment or a qualified representative in France, they carry out transactions that are part of a complete business cycle