J'ai fait appel à Maître Uzan dans le cadre d'une procédure fiscale longue et techniquement complexe. Analyse rigoureuse du dossier, réponses précises dans des délais parfois très courts, et surtout une vraie capacité à maintenir un dialogue constructif avec l'administration plutôt qu'à durcir inutilement les positions.
Il a pris le temps de m'expliquer chaque étape et les options possibles, sans jargon et sans promesses excessives. Le dossier s'est conclu par une issue négociée.
Un accompagnement sérieux, du premier échange jusqu'au suivi complet de l'exécution. Je recommande sans réserve.
Foreign Salaries
By Marc Uzan, French tax lawyer in Paris
Foreign Salaries: Reporting and Taxation in France
Tax lawyer at the Paris Bar since 2008 – exclusive tax law practice, including international remuneration
Summary
- French tax resident ⇒ taxation of worldwide income in principle (article 4 A of the CGI), subject to tax treaties.
- Schedule 2047: in principle required when the salary is taxable in France; depending on the treaty, it is then carried over to box 1AF with box 8TK (credit equal to the French tax) or to box 1AG with the credit in box 8VM (credit equal to the foreign tax). In the case of exemption with the effective rate, the salary is in principle declared directly in box 1AC of return 2042 C, without schedule 2047.
- Possible exemptions: article 81 A, subject to conditions (for example certain activities carried out abroad for more than 183 days over 12 months, or business development of more than 120 days).
- Tax lawyer: analysis of tax residence, calculation of the tax credit, defense in the event of an audit.
What French tax rules apply to a foreign salary when you remain a tax resident of France?
- Worldwide taxation by default: If you are a French tax resident, article 4 A of the CGI taxes your worldwide income, including foreign salaries, unless a bilateral treaty provides otherwise.
- International tax treaties: to eliminate the double taxation of salaries, many treaties provide for a tax credit equal to the French tax corresponding to those salaries; others provide for a credit equal to the tax paid abroad, or for an exemption in France with the income taken into account for the effective rate (see below).
- Exemption cases: certain situations allow a total or partial exemption in France (article 81 A, for example for certain assignments abroad, or the impatriate regime of article 155 B).
How do I complete form 2047 step by step for my foreign salaries?
- Analysis of the treaty, ideally by your lawyer: applicable tax treaty and method used to avoid double taxation.
- Conversion of the salary into euros, in principle at the rate on the day of payment (for example the ECB rate).
- Form 2047: the salary is in principle entered in the salaries section, without deducting the tax paid abroad; other sections are used, depending on the treaty, to calculate the tax credit.
- Income tax return: this amount is in principle carried over to box 1AF (credit equal to the French tax) or box 1AG (credit equal to the foreign tax) of return 2042.
- Box 8TK or boxes 8VM, 8WM, 8UM: the salary is also carried over to box 8TK if the treaty provides for a credit equal to the French tax; if it provides for a credit equal to the foreign tax, that credit is entered in box 8VM, 8WM or 8UM depending on the household member.
- Supporting documents: it may be useful to keep the foreign payslips and the proof of tax paid abroad (translated if necessary), which may be requested in the event of an audit.
Tax credit on line 8TK: how can double taxation of my foreign salaries be avoided?
| Tax treaty | Method | Boxes on the return | Amount of the credit | Useful supporting documents |
|---|---|---|---|---|
| Most common case for salaries | Credit equal to the French tax | 1AF and 8TK (after schedule 2047) | Equal to the French tax on the salary | Proof of taxation abroad |
| Some treaties | Credit equal to the tax paid abroad | 1AG and 8VM, 8WM or 8UM (after schedule 2047) | Tax paid abroad, up to the corresponding French tax | Receipt or certificate of payment |
| Some treaties, or article 81 A | Exemption with the effective rate | 1AC (return 2042 C), without schedule 2047 | No credit: the salary is not taxed, but it is taken into account to calculate the rate | Proof of the activity carried out abroad |
What specific exemptions can I claim for my foreign salaries?
- Article 81 A: an employee domiciled in France who is sent abroad by an employer established in France (or in another State of the European Union or the European Economic Area that has concluded an administrative assistance agreement with France) may, subject to conditions, be exempt from tax in France on the salary for this activity: in particular where that salary has been subject abroad to a tax at least equal to two-thirds of the corresponding French tax, or for certain activities carried out for more than 183 days over 12 months (construction sites, natural resources, shipping) and business development assignments of more than 120 days. The conditions are strict and are assessed case by case; the exempt amounts are in principle still taken into account for the effective rate.
- Article 155 B (impatriate regime): reserved, subject to conditions, for people coming to work in France who were not tax-domiciled there during the 5 calendar years preceding their taking up of duties. It concerns the opposite situation (arrival in France), but may be of interest to a person returning to France after a long period abroad.
What I see in my cases
The foreign salaries I see in my cases are often high, and part of them may not be taxable in France depending on the applicable treaty or where the work is performed. These optimisations are frequent, but the tax authorities know these rules poorly and tend to refuse anything poorly presented. I therefore make sure the return is clear and documented from the outset, with supporting documents ready in case of questions.
Two situations come up often. First, teleworking from France for a foreign employer, which frequently causes difficulties, particularly with payroll, whose consequences then have to be untangled for the employee. Second, dual tax residence, which is fairly common: it is generally resolved through the tax treaty, provided the situation is properly framed from the outset. Contrary to a common misconception, tax residence is not simply a matter of the number of days spent in France: in principle, it is enough for the family to live in France, or for the main professional activity to be carried on there, to be resident there.
Why entrust the management of my foreign salaries to a tax lawyer?
- Legal certainty: the lawyer checks that the right tax treaty is applied, calculates the tax credit (equal to the foreign tax or to the French tax) and analyses your tax residence, in order to limit the risk of reassessment.
- Tax optimization: They advise you on the choice between the standard deduction and actual expenses, explore exemption options (81 A) and help you plan your cross-border bonuses or stock options.
- Anticipating audits: The lawyer builds a convincing file in the event of a tax audit (with translated supporting documents and proof of foreign tax) and assists you throughout the entire process: tax ruling (rescrit), litigation, hierarchical appeal.
FAQ
Why does France tax me when tax has already been withheld from my foreign salary?
France applies worldwide taxation to its tax residents. However, to avoid double taxation, tax treaties often provide for a tax credit in France, equal either to the French tax on the salary or to the tax paid abroad, up to the corresponding French tax. Some treaties instead provide for an exemption in France, the salary then being taken into account for the effective rate.
Depending on the case, the salary is in principle also reported on line 8TK (credit equal to the French tax), or the tax credit is entered on line 8VM, 8WM or 8UM depending on the household member (credit equal to the foreign tax).
How do you complete form 2047 and box 1AF online for a salary received in the United Kingdom?
In principle, the salary received in pounds is first converted into euros (for example at the ECB rate on the date of payment). This amount, without deducting the tax paid in the United Kingdom, is then entered in the salaries section of schedule 2047 and carried over to box 1AF of return 2042. It may be useful to have these steps checked by your lawyer.
Under the France–United Kingdom treaty, the salary in principle gives entitlement to a credit equal to the French tax: its amount is then also carried over to line 8TK.
What can be done if I discover that my 2024 foreign salaries were not included on line 8TK?
It is advisable to contact your lawyer first, to determine with them the most appropriate course of action for your situation. Depending on the case, it may be possible to file an amended return or a claim, in principle until 31 December of the second year following the year in which the tax was assessed for collection (e.g. until 31/12/2027 for 2024 income taxed in 2025). It may also be useful to check that the tax credit has not already been included by the tax authorities.
In case of doubt or reassessment, a tax lawyer can help you build a convincing file.
Glossary
- 1AF / 1AG: boxes of the income tax return for foreign salaries taxable in France: 1AF where the treaty provides for a credit equal to the French tax, 1AG where it provides for a credit equal to the foreign tax.
- 2047: Form dedicated to foreign-source income (salaries, dividends, interest...).
- 8TK / 8VM: Lines relating to the tax credit provided for by the applicable tax treaty (8TK: amount of the salary giving entitlement to a credit equal to the French tax; 8VM, 8WM or 8UM: amount of the credit equal to the foreign tax).
- Article 81 A: possible exemption, subject to conditions, of certain salaries relating to an activity carried out abroad (for example business development assignments of more than 120 days over 12 months).
Further reading
CGI, article 81 A: exemption of certain salaries for activities carried out abroad
For business development assignments, article 81 A in principle provides for an exemption of the salaries relating to the activity carried out abroad where that activity exceeds 120 days over a period of 12 consecutive months. For certain other activities (construction or assembly sites, exploration or extraction of natural resources, navigation on board certain ships), the required duration is in principle more than 183 days over 12 months.
The exemption in principle covers only the remuneration relating to the activity carried out abroad; the exempt amounts are taken into account for the effective rate and declared in box 1AC of return 2042 C. The employer must in principle be established in France or in another State of the European Union or the European Economic Area that has concluded an administrative assistance agreement with France, and evidence of the assignments (assignment orders, schedules, reports) may be requested in the event of an audit.
Tax credit and tax treaties: credit equal to the foreign tax or to the French tax
- Credit equal to the foreign tax: tax credit equal to the tax paid abroad, up to the corresponding French tax (box 8VM, 8WM or 8UM depending on the household member). If the foreign tax is lower than the French tax, the difference remains payable in France.
- Credit equal to the French tax: tax credit equal to the French tax on the salary (box 8TK), provided for by many treaties signed by France.
The choice depends on the text of the tax treaty applicable between France and the country where the work is carried out.
