Errors in Income Tax Notices for American Citizens Living in France

Errors in Income Tax Notices for American Citizens Living in France

The CM-Tax tax law firm frequently observes that its American clients residing in France receive income tax notices containing certain errors.

Under the terms of the tax treaty between France and the United States, American citizens living in France are entitled to a specific tax credit on certain U.S.-sourced income, in relation to income tax.

This tax treaty provides a tax credit equivalent to the amount of French tax due on the specified U.S. income, as long as certain reporting requirements are fulfilled.

The following types of U.S. income are particularly relevant:

• U.S. pensions
• Certain dividends paid by U.S.-based companies
• Some interest from U.S. sources
• Capital gains on the sale of certain U.S. securities

American citizens living in France must report this U.S. income on their French tax returns, but the corresponding tax should be offset by a specific tax credit.

In addition, social security contributions on U.S. income, as they are treated similarly to income tax, should also be cancelled.

In practice, we often find that the French tax authorities send incorrect tax notices to our American clients, where the tax credit is either reduced or not applied at all.

As a result, they are asked to pay taxes in France that are not owed.

The CM-Tax law firm and its team of bilingual French tax advisors, with offices in Lyon, Marseille, and Toulon but serving all of France, are available to assist American citizens living in France. We ensure their tax notices are accurate and undertake the necessary steps to obtain any refunds due, through a formal dispute process with the tax authorities.

The CM-Tax law firm also advises the international community on all matters related to French tax law, including tax consulting, litigation, and real estate law. We provide support to international clients in the sale and purchase of French real estate.