Steps Outline

THE STEPS: AN ACCUMULATION OF KNOWLEDGE ON HOW TO ACTUALLY MAKE THIS MOVE (at this time of writing)

RULE NUMBER ONE

YOU (and anyone in this adventure) MUST BE FLEXIBLE !!! Open to ideas, change of plans, loosening of expectations.

RULE NUMBER TWO

Photocopy, scan and file EVERY piece of documentation ; mobile phone, thumb drive, cloud drive. What can be misplaced, will be.

THE DECISION

1. Understand first what makes you comfortable and equally, unnerves you. If you are not alone, you must all have similar goals.

2. Most of the steps revolve around finances and health, since they create your stability.

THE USA SIDE

Taxes. Get professional help. Discuss with a tax attorney the issues surrounding taxes and your move. If you decide to keep your address (which is a requirement in some cases), you can still pay your owed taxes on term. In our discussion they told us that anything under $7,500 yearly was not taxed and any amount above that, was. For us also, the French side needs to coordinate with the US side under a non-double tax treaty and accountants on both sides need to share.
Banking. This is a two part issue: First find a U.S. bank with easy access to your funds overseas which will not swallow you up with fees. There are many hidden fees, so research thoroughly. Certain banks may have a tie to the country that you have targeted. Having two banks is actually recommended to deal with any complications that may come up with having just one. If you experience identity theft or if some unforeseen event compromises one account, you can move funds around with the second bank. The main repeated recommendations are Charles Schwab or HSBC. Your bank is your mainline to finances and you need to have options. Secondly, designate a Financial Power of Attorney that you can completely trust to act on your behalf in a crisis. For us it was a family member, who without question was our go to person. If they had not been available, we would have chosen a professional over any other person.
Credit Cards. Again, research and switch to overseas fee-friendly cards. If you are too close to departure and do not have time to establish a relationship, DO NOT close your current cards as you open the new ones. You need cards for emergencies and over time can close the ones you have replaced for overseas use. Just charge a few items every so often to keep them active, paying the bills completely off when they arrive.
Passport. Make sure yours meets the requirements. You can not travel for the first 6 months after they have been issued to you. You can not travel within 6 months of it’s expiration. You must have at least two empty pages for travel stamps. To meet these parameters, renew them well before your departure to meet the first requirement and to give you all the time you need on the second, while ensuring you have blank pages. Depending on the area that you are traveling to, get the passport cards available. They will identify you on your daily life where you land, without you always having to carry your passport (which is not recommended). If you are traveling where they are not used or recognized, get a global entry card to carry instead.
Health Insurance. This is a requirement for overseas visas. There are several global insurance options and can possibly be very expensive. You will need to spend quite a bit of time researching the options which fit you best. And you need to verify that it meets the requirements of your destination. Your biggest issues will be insuring your prescriptions are not interrupted.and getting reimbursed.

THE OVERSEAS SIDE

Visa. It is the consulate of the country you are going to, which is the office that can answer questions and approve your visa application. Do your homework before going first, answering as many questions on your own. It is really best to find an immigration attorney and tax attorney for the country you have picked. They will answer all of your questions and handle the process. You can certainly decide to handle either on your own but many voices of experience state you should not, so we voted for that step. And we’re thankful we did. In any case, researching ahead will help you know what questions you should even be asking without wasting anyones’ time. And think of the documentation as being akin to tax filings or property purchases.
Abode. In looking for a place to lease, try to be in the position of being able to view and visit before signing a contract. Look at the place and surrounding area for the amenities you’ve determined you need. If you can’t (as we could not), make your lease for as short a period of time as will work. Look carefully at your sites and verify the area with the online maps which allow you to visually ‘walk’ the streets, like Google. Know that the accommodations will be different from the U.S. ones. Even the descriptive phrases do not mean the same as they do in the U.S. RENT before you purchase any property in the area, if buying property is your goal. ALSO know that you will be levied taxes that will impact how much you are actually paying. Finding a highly rated, local real estate broker is also strongly recommended. Again, professional help.
Banking. As stated on the U.S. list, you should already have set up two different banks and put a FPOA in place. It is recommended to open a local bank account once you have settled into your long term accommodation. Their rules can be much more stringent than those in the U.S. Check in advance on their required documentation. Our wait between application and approval was a little more than a week but receiving the cards and operational codes took another. Our choice had US branches so that we could transfer money from the US to France without fees which are significant. BUT in retrospect, we found we should have opened the US side before going overseas. THAT should have happened first and been one of the two US banks we chose from the start.
Health. You will need to find a local doctor. Check your health insurance for their approved network of doctors. Check also on how you will get reimbursed for costs. We discovered too late that our insurance pharmacy provider will not accept electronic receipts for reimbursement. It is cost prohibitive to have prescriptions mailed from the US and most avenues are illegal. We had our prescriptions sent in their original packages by international carrier with our doctors signed letters stating we’d been prescribed these items along with doesage amounts. They were not stopped by customs but cost us in shipping as much as the medication cost us. Sending the documentation to receive reimbursement by post to the US is also very expensive and not a viable option.

———————————————————————

TAXES – much of this has been found and borrowed from on-line

Income Tax is paid, no matter where the income originates, by you, where you live. A Payroll Tax is paid by the employer, levied where the employment takes place. Most countries have “double taxation” treaties with other countries, to decide who gets the taxes, and avoid double taxation, but it can get very complicated. Normally if you stay in a country for more than half the tax year you are liable for Income Tax in that country.

France:

Tax residents of France must report worldwide income. Tax is calculated on the total income of the fiscal household, which includes income from a spouse, children younger than 18, and, in some cases, adult children, too. Americans are given somewhat favored treatment, as the U.S.-French income tax treaty takes into account the U.S. rule that Americans are required to pay tax on U.S. income in the U.S.

To compensate for this, the French-U.S. tax treaty allows U.S.-source income to escape direct French tax, but will push the tax rate on other income to a higher rate-band. The top French tax rate is currently 40%, but surtaxes could boost the top rate to 51%. The rate of tax also depends on your marital status and the size of your family.

As indicated above, tax treaties should always be checked to be sure that you are getting every advantage offered by your country’s treaty with France. (This also applies on the gift and estate tax level.) French income tax paid on non-U.S. income and capital gains can generally be used as a credit against U.S. tax on the same income.

Non-residents are taxable in France on French-source rental income, French-source capital gains from the sale of real estate, and other special categories of income, such as the sale of art and antiques. They are also subject to inheritance tax on their French real estate. Use of a holding company, such as an “SCI,” to purchase real estate will not protect the owners of the shares from French inheritance tax, and certainly not from tax on rents derived from that real estate.

Are You a French Tax Resident? – also borrowed from on-line sites

Many people have the idea that tax resident means that you are present in France for more than 183 days during a calendar year. Wrong. Some people think that you are not taxable if you do not have a resident card. Wrong. The French law provides four factors, and if you meet any one of them, you are considered as having a tax residence in France:

1. Your “foyer fiscal” is in France. This is the place where you alone or you and your family customarily live. If you are married and your spouse and children live in France, you are almost surely going to be considered as having your foyer fiscal in France, even if you spend most of your time working outside France.

2. You spend more time in France during the calendar year than in any other country. This is the derivation of the famous but misleading 183-day rule. If you spend more than 183 days in France in a calendar year, then mathematically you cannot spend more than that elsewhere. So even if you are retired or work occasionally in other countries and not at all in France, you have satisfied this criterion. But if you spend less than 184 days in France but cannot prove that you spent more elsewhere, you have not satisfied the criterion, and are exposed to being categorized as a French resident.

3. You work in France, either as en employee or self-employed, unless you can show that the activity is accessory to your main activity located outside France.

4. The center of your economic interests is in France. This is less specific than the others. It could mean that you manage your foreign investments from France, or that you derive most of your investment income or of your total income, of whatever nature.

If you can prove that you are also resident in another country, such as the U.S., as determined by U.S. law, then the Income Tax Treaty between those countries provides a set of rules that helps to prevent double taxation. If each country can claim you as resident under its own laws, the treaty makes nationality the tie-breaker, so if you have U.S. nationality and not French as well, the French cannot tax you. Remember, though, that this holds ONLY in the case where you are considered a resident of France by the French tax people and you can prove that you are also a resident of the U.S., a rather rare case. The treaty provides a step-by-step analysis for analyzing your residence situation before you get to the tie-breaker step.

While the French system does not offer as many tax deductions as in America, there are some, such as mortgage interest deductions, investments in certain real estate programs, charitable donations, support payments, and others, including special deductions for employees.

If you are self-employed, you will also be able to claim expenses such as travel to and from work, business rent, salary and related expenses, business meals, travel and entertainment, business gifts, and many others. Americans will find that the range of deductions for a self-employed person is quite similar to “Schedule C” deductions in the U.S.

The filing deadline for the Déclaration des Revenues has consistently been pushed further and further back. The filing deadline for 2007 is May 31, 2008. The completed document must be filed by that date or else a 10% fine is levied on the eventual tax due. Unlike the U.S., you do not enclose payment with the Déclaration.

The tax is calculated by the tax department and you will be billed in three installments (February, May, and September/October) or, if you so opt, it can be withdrawn automatically by the tax department in 10 monthly installments. So you are in effect paying your 2007 in 2009, your 2008 in 2010, etc. Funny system, but it seems work. The French have been talking for years about income tax withholding from salary and other early payment systems, but nothing seems in the offing.

Social security charges are quite high. Employees lose about 22% of their salary to social security withholding (the employer pays an additional 40% or more). Self-employeds can expect to pay about 35% of their profit as social security tax. While this is deductible in the following year’s Profit & Loss Statement and thus reduces income tax, it is a small balm. A self employed can conceivably pay about 70% of his or her profit in the form of taxes: social security, doing business tax ( taxe professionelle), and income tax.

If you become a French resident, you pay income tax in France. You are applying for a visa to become a legal French resident, you are (by implication) signing up for all the legal responsibilities that implies, including French Income Tax.

The taxes which are imposed according to the convention signed between France and the United States are as follows:

– for France: the income tax, the company tax, the salaries tax, the wealth tax;

– for the United States: the federal income taxes imposed by the Internal Revenue Code (except the social security taxes) and the excise taxes imposed on insurance premiums paid to foreign insurers with respect to private foundations.

The convention applies on the taxes imposed on behalf of one of the states, irrespective of the manner in which they are levied. The treaty will also apply on any taxes imposed in place of or in addition to the ones described above, after the convention has been signed.

The USA is unique, in that it demands filling in tax forms for all citizens, even if they no longer live in the country. Even if you left as a child: http://www.theatlantic.com/international/archive/2015/02/boris-Johnson-renounces-us-citizenship-tax-bill-mayor-london/385554/

The US government has placed requirements on banks to disclose assets of US citizens, that cause so much problems that many Swiss banks are faced with a choice to close their US branches (so they are outside the reach of US courts), or refuse accounts from US citizens, even those living in Switzerland.

——————————————————————

UPDATE – 09/2021:

This is cut from The Local – an expat French online news source:

Regarding moving to France: Here’s a guide to what you need to be thinking about, depending on your situation.

You hold the passport of an EU or Schengen zone country

Congratulations, because you have hit the passport jackpot in terms of moving. If you have the passport of any EU country, including Ireland, or a Schengen zone country then you are covered by EU Freedom of Movement and can move to France with minimal paperwork. This applies to dual nationals, but you will need to ensure that you use your EU passport for all official functions (travel, ID etc) in order to benefit from this.

See also on The Local:

Share this: