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Old May 1st 2012, 2:14 pm   #1
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Default Staying in France after 6 months

Hello,

I moved to Paris at end of January, after my boss, the overall lead for our European division, was happy for me to work from our Paris office (but I continue to be paid etc as a UK employee). It has been everything I have hoped for and more, but the downside that I really, really do not want to move back to London (I am Irish, and have lived in London for 8 years or so). The main reasons being the huge difference (for me) in quality of life, less stress, better transport, culture, better food, wine, and Paris is as beautiful a city as one could hope to find.

Anyway, our Finance department (run from the US by the CFO) have it in their heads I can't stay 1 day more than 6 months. The reason they give is tax reasons (but can't expand). They believe the company are liable, but I thought the liability in France would fall upon the individual?

I think if I could show them this via my manager, there may be a possiblity I could stay on - does anyone have any advice on this, specifically as to whether there is a cost to the company (of me staying on) or whether I would be breaking a law to continue in the same vein? A French contract seems out the question unfortunately.

Many thanks for all advice and or thoughts.

Andrew
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Old May 1st 2012, 7:25 pm   #2
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Default Re: Staying in France after 6 months

As far as I am aware the difference is that you would just need to pay tax in France; you not them; you could continue to pay NI in the uk for many years (up to 5 I think but don't quote me on that) your uk company would just need to send the form to entitle you to have health cover.

For Airbus employees the cutoff seems to be 5 years Good luck
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Old May 1st 2012, 8:19 pm   #3
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Default Re: Staying in France after 6 months

Quote:
Originally Posted by ajhurley View Post
Hello,

I moved to Paris at end of January, after my boss, the overall lead for our European division, was happy for me to work from our Paris office (but I continue to be paid etc as a UK employee). It has been everything I have hoped for and more, but the downside that I really, really do not want to move back to London (I am Irish, and have lived in London for 8 years or so). The main reasons being the huge difference (for me) in quality of life, less stress, better transport, culture, better food, wine, and Paris is as beautiful a city as one could hope to find.

Anyway, our Finance department (run from the US by the CFO) have it in their heads I can't stay 1 day more than 6 months. The reason they give is tax reasons (but can't expand). They believe the company are liable, but I thought the liability in France would fall upon the individual?

I think if I could show them this via my manager, there may be a possiblity I could stay on - does anyone have any advice on this, specifically as to whether there is a cost to the company (of me staying on) or whether I would be breaking a law to continue in the same vein? A French contract seems out the question unfortunately.

Many thanks for all advice and or thoughts.

Andrew
Hi,
What does your London boss say? Does he want you back in London or is he rooting for you?
If the duration of the Paris transfer isn't specified in your Contract, then I'd ask the French Accounts or Legal Dept. to explain why you can't stay longer than 6 months. There may be French or US company taxes, etc.... depending on the duration of employment in France, which you're unaware of.
These are just random thoughts, sorry I can't help more, but it's not just French laws and regulations involved. Hope you find a solution.
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Old May 2nd 2012, 8:34 am   #4
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Default Re: Staying in France after 6 months

Thanks for both of your replies.

No accounts/legal in France, only in UK (European HQ). I think boss would be fine with it, as we get on very well, he has just promoted me, and the distance working isn't an issue (all of people we work with are spread out over Europe).

The 5 years point certainly offers hope. Before I make any suggestions, I', hoping to know for sure that there is no cost to the company.

In the meantime, I'm starting to look elsewhere. My French is getting better, between B1 and B2 as per last assessment, and I'm taking daily private lessons plus doing conversation exchange in the evenings. My hope is it will reach a conversational level (probably the most general statement of all time!) by end July, and this would open up more opportunities, where would work in English but need a certain level of French. I'd much rather stay in Paris but am looking all over France.
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Old May 2nd 2012, 8:40 am   #5
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Default Re: Staying in France after 6 months

Andrew

I suspect the reluctance to extend your French work period is down to the fact that you may become liable to French income tax once you have been living/working there for more than 183 days. This is a complex area, but you might be exempt from French tax if, according to the UK/French tax treaty:

Article 15{Employments}



(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

[(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any period of 12 months; and]


(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and


(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State

Are you paying any French taxes and social security if they become payable or is your employer? The knock on effect impacts you as an employee but also the employer. This is probably the crux of the matter.
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Old May 2nd 2012, 8:45 am   #6
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Default Re: Staying in France after 6 months

Thanks for your mail. Your last point is at the crux of the matter - I would of course file a tax return in France, and pay whatever is needed after taking into account the double taxation agreement between UK and France - that part I am fine with and understand quite well. The thing I don't know is whether or not there is an additional cost to my company, in the form of French social taxes etc, or do they just continue to pay my UK contributions only.
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Old May 2nd 2012, 8:50 am   #7
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Default Re: Staying in France after 6 months

The company can generally assign you from the UK to France for a period of up to 5 years and keep you paying UK NIC but this implies you are returning to the UK after completing the assignment which does not sound like your intention. If this is a one-way move then French social security will probably be due and this is expensive for employers. But there may be other reasons for the relucatnce to do with headcount issues within the separate companies, or perhaps labour law issues in France. The only way to find out is to try and raise these issues for discussion with your employer.
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Old May 2nd 2012, 8:58 am   #8
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Default Re: Staying in France after 6 months

It may be a one way move in my head, but it certainly wouldn't have to be set up like that (or agreed in that way by my company). If that is the case, that would greatly help my case, as once I can show there would be no cost/tax/legal issue for the company, it just becomes a work issue (pretty sure this part would be fine).
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Old May 2nd 2012, 7:25 pm   #9
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Default Re: Staying in France after 6 months

I think the crux of this situation is the difference between being seconded or posted to France to work as opposed to living in France and working for a UK company.

In the first case there are rules which enable you to work and enjoy French health cover via an E101 form.

In the second case the UK company would have to set up a French entity for you to work under and this would oblige them to pay cotisations and social charges etc, and being subject to French labour laws, all or which can be onerous and horrendously expensive so unsurprisingly few companies will be willing to go to these extremes for a single employee.

It rather sounds to me as though your employer has not properly or adequately looked into the whole subject of you working for them in France as if they had the question of 6 months simply would not arise. This in turn could imply that you are not even working within the law.

I think you need professional advice and from somebody who really does know and understand the French side.
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Old May 2nd 2012, 10:01 pm   #10
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Default Re: Staying in France after 6 months

Quote:
Originally Posted by Im_and_Er View Post
.

I think you need professional advice and from somebody who really does know and understand the French side.
Quite agree, which is why I suggested speaking to the Accounts or Legal Dept. of the French company. But OP said there isn't one...
A consultation with an Avocat specialised in French/European Employment Laws seems advisable.
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Old May 3rd 2012, 9:00 am   #11
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Default Re: Staying in France after 6 months

Quote:
Originally Posted by Im_and_Er View Post
I think the crux of this situation is the difference between being seconded or posted to France to work as opposed to living in France and working for a UK company.

In the first case there are rules which enable you to work and enjoy French health cover via an E101 form.

In the second case the UK company would have to set up a French entity for you to work under and this would oblige them to pay cotisations and social charges etc, and being subject to French labour laws, all or which can be onerous and horrendously expensive so unsurprisingly few companies will be willing to go to these extremes for a single employee.

It rather sounds to me as though your employer has not properly or adequately looked into the whole subject of you working for them in France as if they had the question of 6 months simply would not arise. This in turn could imply that you are not even working within the law.

I think you need professional advice and from somebody who really does know and understand the French side.
Your first 2 paragraphs I agree with, but your next few points are wrong. We have a French entity, and I am at this point in time very much working within the law.

Professional advice clearly needed...
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Old May 3rd 2012, 6:29 pm   #12
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Default Re: Staying in France after 6 months

In that case I think you need to get your finance department to specify exactly what 'tax concerns' they have, without knowing that it's very difficult to advise further.
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Old May 18th 2012, 8:04 am   #13
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Default Re: Staying in France after 6 months

Just an update for those interested after taking the time to read: After a lot of research, it could be possible but is so complicated (no-one, not even tax depts in France and UK, understand the full picture, ie, how one thing in one country affects the other). How complicated it is would mean Finance would find a way (and I could actually understand this) to not let it through, so I am losing hope for this part.

What they have suggested though, is that if I continued in France, I would have to get a French contract (a no no for our US bosses) and there would be hugely increased social costs. So, a compromise could be I get seconded here for 1 year, and I absorb the social cost difference by reducing my salary 16 % (that's what it works out at, as social costs for company are 45% in France v 25% in UK).

I'd happily do this, for all the fact it would mean a lot less money. But, you can't say you really want something in life and then let money get in the way like this, can you?

Thanks for your help.
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Old May 18th 2012, 8:48 am   #14
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Default Re: Staying in France after 6 months

Ajhurley - apologies, i have only just seen the thread.
You need to be very careful with the healthcare part. I am semi retired, live in France (previously Spain) and return to the UK for a few days most months to work, which is where I am paid.
Newcastle told me very specifically that if I perform ANY work in France (that includes answering a phone call or opening email that would disqualify me from UK health cover immediately, despite paying NI and tax in the Uk on my UK earnings.
Much of what they tell people seems to be contradictory.
So I would make sure you get an undertaking from them IN WRITING before committing.

Good luck
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Old May 20th 2012, 12:16 am   #15
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Default Re: Staying in France after 6 months

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Originally Posted by bigglesworth View Post
Ajhurley - apologies, i have only just seen the thread.
You need to be very careful with the healthcare part. I am semi retired, live in France (previously Spain) and return to the UK for a few days most months to work, which is where I am paid.
Newcastle told me very specifically that if I perform ANY work in France (that includes answering a phone call or opening email that would disqualify me from UK health cover immediately, despite paying NI and tax in the Uk on my UK earnings.
Much of what they tell people seems to be contradictory.
So I would make sure you get an undertaking from them IN WRITING before committing.

Good luck
I suspect the issue is over obligation to pay French social charges, which can be substantial. This page and other pages on the site may help: http://www.french-property.com/guide...-welfare-levy/

French employers often hire (even long-term employees) through temp agencies in order to avoid the obstacles to making them redundant when no longer needed.

You are entitled either to a British EHIC or a French one. It is worthwhile getting some kind of travel insurance (UK Post Office seems to be best), but you need to specify the duration of your stay. The normal policy is only valid for 30-day trips. My daughter fell ill in Switzerland and between EHIC and her P.O. insurance virtually all costs were covered, including a rescheduled flight home and limo trips to and from the airport. The insurance had cost her £130 for a year but has to be bought before you leave, or while you are in, the UK.

Various European Court decisions address the work in one EU country of employees of a firm in another EU state. Rush Portuguesa dealt with Portuguese works on a project in France before Portuguese had full right of establishment. They could work for one year in France on their Portuguese payrolls.

When I spoke to HMRC about one of my offspring's temporary-indefinite work for a UK company in Switzerland they were quite happy to continue such benefits as child allowances so long as NIC and PAYE were deducted. And that could continue for a year or until the Swiss required registration in their systems.

"Employee leasing" is common in America. A firm manages the paperwork, the taxes and the salaries and keeps the employee on their books. Similarly to the temp-indefinite practice. Some UK firms might find this a satisfactory workaround.

Don't forget company pensions, and despite the totalization agreement, if you are able to pay voluntary class 3 NICs do it: it's cheap, inflation-proofed pension insurance. Some EU countries don't allow voluntary accumulation of a second state pension in the same year; others do.
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