[French taxes] What should I do ?

Hi,

I'm a developer and I created a few digital services I own and I sell by investing on marketing.

But I'm living in France, I didn't create any companies for now and I have still a year and a half before completing my current studies, then I'll leave.

I'm using Paypal for my business, I would be fine if I would win less than 10 000€ in the year (then I wouldn't have to declare it), but by reaching this amount I would have to pay huge taxe in France, as a particular they wouldn't even take in account my charges in marketing, they would tax me on the total amount received, and I would go bankrupt.

I still have several months before my business reaches the 10 000€ received on Paypal.

If I create a company in France now (I've just studied I think all possible french company types in my situation), I would have anyway to pay around 25%-50% of my benefits in taxes which is really huge.

Is there a legal way to avoid those taxes while I'm stick for still 1 year and a half in France ?

Thanks,

I'm fairly sure they only tax you on everything above 10k, not the whole lump sum. That's how it works in all other countries I'm aware of

psyxo said:

Hi,

I'm a developer and I created a few digital services I own and I sell by investing on marketing.

But I'm living in France, I didn't create any companies for now and I have still a year and a half before completing my current studies, then I'll leave.

I'm using Paypal for my business, I would be fine if I would win less than 10 000€ in the year (then I wouldn't have to declare it), but by reaching this amount I would have to pay huge taxe in France, as a particular they wouldn't even take in account my charges in marketing, they would tax me on the total amount received, and I would go bankrupt.

I still have several months before my business reaches the 10 000€ received on Paypal.

If I create a company in France now (I've just studied I think all possible french company types in my situation), I would have anyway to pay around 25%-50% of my benefits in taxes which is really huge.

Is there a legal way to avoid those taxes while I'm stick for still 1 year and a half in France ?

Thanks,

Click to expand...

Not really. You have to pay taxes in your country if it exceeds the limit. You can go blackhat on it and try to avoid it but this is your own responsibility then. If you will get caught (and the EU is pretty smart about tax fraud) you will face some big problems. The only thing i can recommend to you is if you create a company then try to write off as much as possible on your tax report.

I don't see what makes you think you don't have to pax tax under 10k in France.
You need to create a Micro-Entreprise (ex Auto-Entreprise) and pay around 23% of your incomes. I think you can sell up to 70k with a MicroEntreprise now with new laws. If you reach that, you'll need to create something like a EURL or SASU.

You should contact a tax advisor in your country.

Valkurm said:

I don't see what makes you think you don't have to pax tax under 10k in France.

Click to expand...

He's right, first 10k are not-taxed.

Bread said:

I'm fairly sure they only tax you on everything above 10k, not the whole lump sum. That's how it works in all other countries I'm aware of

Click to expand...

Exactly.

So @psyxo , for 15k, you'll pay 10k* 0 + 5k * 14/100 = 700E

No need to bother with tax optimization at this levels, just pay 700E. Once your income gets bigger, you'll pay qualified pros to optimize the numbers for you. But for now, just pay and focus on increasing your income.

If you're starting a business, better stay away from Paypal.

At 2500€ they will block your money, even if you're legal company and send all documents they ask.

I am in France too, if you have money go for some offshore account, if not you have no choice you have to pay...

jazzc said:

He's right, first 10k are not-taxed.

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He's not.
What's your quoting is income tax rates, not company taxe rates.
If he choses to open a "Micro-Entreprise" (best choice of him), he'll need to pay 23% of his income on a monthly or quarter basis.
Been doing it for a few years before opening a "real" company here.

Valkurm said:

He's not.
What's your quoting is income tax rates, not company taxe rates.
If he choses to open a "Micro-Entreprise" (best choice of him), he'll need to pay 23% of his income on a monthly or quarter basis.
Been doing it for a few years before opening a "real" company here.

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If he has to pay 23% of his income without a tax free allowance, why is a micro-enterprise the best choice?

Not sarcastic, genuinely curious as this is a lot different to UK Tax laws

Valkurm said:

What's your quoting is income tax rates, not company taxe rates.

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You are right, my bad.

A quick question, how can "France" see the amount of money in your Paypal account? Wouldn't it be a problem only if you'd withdraw the 10k all of a sudden? In France they have access to your Paypal account balance?

Open a company in Delaware (using some of the services they provide on the internet) or apply for Stripe Atlas (Stripe will create a company for you with a US bank account) for $500. Register for Payoneer and get paid from your company account straight to your Payoneer card. Withdraw fees are bigger than on PayPal, but no one is after you for taxes...

You have to declare every euro you earn in France, there is no limit that's a myth.
Also PayPal will block your account above 2500 euros and ask for business proof.
Just create a Micro Enterprise like auto enterprise and you'll be fine, 25% tax is quite fair.

I live in France. i'm not an expert but I know that if you send money home to your family the franch gouvernement will reduce the amount of taxes. if you are not planing to stay/comeback to france don't declare it or pay it its a rip off anyway.

PS: I don't think you should worry about it. Last year I made a bit more than you and ended up paying around 300€ for taxes. So, i guess you will pay less.

Get an accountant

Below 10k you pay nothing on yearly income tax but still need to declare and will pay 23% tax for services and 50% for selling physical products, that for microenterprise, for others bigger status on which you can hire it's really worse

The whole EU has a powerful mutualized system to track cheater and agreement with many banks and company like PayPal, in France it's more serious to cheat the tax than selling drugs (not even a joke)

What about Estonian e-residency?

nokran said:

What about Estonian e-residency?

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Wow you answered almost 4 years late, what about Estonian e-residency ??? Are you familiar with the French tax system ? Maybe you're a french accountant ? or are you just commenting non-sense on everything you can ?

xgf666 said:

Wow you answered almost 4 years late, what about Estonian e-residency ??? Are you familiar with the French tax system ? Maybe you're a french accountant ? or are you just commenting non-sense on everything you can ?

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ahahaha my mistake, just getting back here (after a 6 year break here) and didn't checked the post dates.... Well I sound a bit outdated. I am familiar with EU and international tax systems. I worked with French clients too, and helped them optimize taxes.

Forget about Estonia e-residency & business creation, I read 100k instead of 10k euros (it will be out of scope to explain this with further details, but long story short - for 1,5y in France while being a foreigner and planning to live somewhere else afterward, I would have recommended creating a business in Estonia online (easy process, less paperwork, require e-residency, but enable you to have the formal structure required for French taxes ... the business will be legit from all sides)

But it was 10k.
For such a small amount of money, France has an interesting system called auto-entrepreneurship where one can create a micro enterprise with less paperwork, less taxes (roughly 21% for consulting) and worry-free declaration. I would have favored this too! Contrary to what the other guy said, depending on revenues one can add its revenue declaration on top of it (6% - special fare related to micro entrepreneurs with less revenues : I guessed OP was a student from previous posts) leading to a all inclusive tax (business & revenue) of 27%