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A local French tax expert has warned people who own property in France to be aware of any taxation risks due to the lack of a treaty between the island and the country, as it swings into its tax season.
Virginie Deflassieux, French Tax Director at BDO Guernsey, says the risks could be costly and owners should be aware of their rights.
“Islanders who own French property and use it as a holiday home won’t usually have to submit a return, but those who rent out their property directly or via rental platforms must report their French rental income in France.Unlike with the UK, the absence of a treaty between the islands and France makes double taxation a very real and sometimes expensive possibility,” she said.
Wealth tax is also in play as its applied on real estate in the country, including properties owned indirectly, if their value exceeds €1.3m. In these cases, returns must be filed.
There are also income concerns, if clients are in France these may fall in the scope of employment laws and make Guernsey residents liable to French tax.
“Equally, one must be careful when working for a Channel Island-based company whilst living in France. Spending prolonged periods and working from the country can alert the French tax authority and spell disaster for both the employee and employer as the tax and social security authorities can assess cases in arrears for up to six years. In the worst case, this could result in the employee in France being pursued for both the employee and employer’s social contributions,” Ms Deflassieux added.
She said professional advisors such as BDO can help in these circumstances.
Pictured (top): Virginie Deflassieux.
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