Your French tax return is more than a translation of your US return

You live in France and have already filed your US tax return. Preparing the French return may appear to be a matter of converting the figures into euros and entering them in the corresponding boxes.

In practice, the US return is a useful document, but it is only one part of the information needed.

The same income may require a different analysis

France applies its own rules to identify income, determine the taxable amount and establish when it must be reported.

Salary, dividends, investment gains and employee share awards must therefore be examined under the relevant French provisions. A category or calculation used in the US return cannot automatically be carried across.

Tax paid in the United States does not settle the French position

French tax residents are generally required to report worldwide income, subject to the applicable treaty provisions.

The France–US tax treaty must then be considered to determine taxing rights and the appropriate relief from double taxation. The result depends on the income and the taxpayer’s circumstances; foreign tax is not simply deducted from French tax in every case.

Foreign accounts require their own review

Income reporting and account reporting are separate obligations.

US bank and brokerage accounts, as well as certain other foreign accounts or contracts, may require additional French declarations. An account should not be overlooked merely because it produced little or no income.

Work from the underlying documents

A reliable French return may require employer statements, investment and transaction records, details of foreign accounts, previous French returns and information about your residence history.

This review helps reconcile the two countries’ reporting while preserving the calculations required by each system.

NAS Avocat assists English-speaking individuals with French tax returns involving US income, investments and employee share awards, and can coordinate with their US tax adviser where appropriate.