Hello cyberocket,
Thank you for your question.
First, allow me to point out the disclaimer at the bottom of this
page: Google Answers is not a substitute for legal, medical or
professional advice in any way. I am but a humble researcher skilled
at finding tidbits strewn about the Internet. Do consult an
international tax consultant to review the particulars of your
personal situation.
That being said...
The French Wealth Tax or Impôt de Solidarité sur la Fortune differs
depending on whether the filer is a resident or non-resident of France
and not as much on the status of citizenry as shown from the two sites
I excerpt below:
http://www.itpa.org/open/summaries/brussels83s.html#f
"The French Wealth Tax: A New Trend? - Pierre Fontaneau
Taxable property includes every right and interest in every asset.
These require to be reviewed on lst January every year. Partial
exemption is applied to woodlands, total exemption to works of art and
to antiques over 100 years old. The first 3 million francs (to be
adjusted for inflation) is exempt; the rates thereafter are
progressive. Rates on business assets are lower than the rates on
private assets. The tax is expressed to be related to market value:
this is by no means easy to ascertain in practice. Assets of husband
and wife are aggregated ("wife" including any woman with whom a man
shares his life).
In principle, no distinction is made between residents and
non-residents, but non-residents are subject to the tax only by
reference to their assets situated in metropolitan France and its
overseas departments, and they may deduct debts only to the extent
that these relate directly to French property. Non-residents are not
taxable on their "placements financiers" - i.e. bank accounts, loans
and shares, but "participations" - i.e. shareholdings of more than 10%
of the share capital of a company, and holdings of a value of over 10
million francs - are taxable. In principle, the tax applies only to
individuals, but a foreign company is taxable if it is primarily
invested in French land.
Companies incorporated in "tax havens" are taxable persons. For these
purposes, a "tax haven" is any country with which France does not have
a tax treaty including an article concerning the mutual assistance for
pursuing fiscal fraud. The law looks through "personnes interposees" -
nominees and other screen entities. Companies which are resident in
treaty countries are not taxable, unless they can be seen as a vehicle
for a French resident.
The treaty definition of "residence" is applied for wealth tax
purposes, but where a non-resident is subject to a wealth tax in his
home country, he may still suffer double wealth tax on French assets.
This problem will require changes in the treaties to which France is a
party: a start has been made with the Swiss treaty.
The wealth tax is not primarily a revenue-raising tax; its more
important effect is to give the Revenue authorities information about
the affairs of wealthy taxpayers - information which make it possible
for the Revenue to collect other taxes more effectively."
Perhaps stated more clearly:
http://biz.yahoo.com/ifc/fr/tax.html
"Tax Regulations as of March 28, 2002
Capital Taxes
Enterprises no longer benefit from a reduced tax rate for capital
gains, except those resulting from the disposal of qualifying
participation.
France levies no capital taxes on corporations, but individuals
resident in France are subject to a wealth tax (Impot de Solidarité
sur la Fortune-ISF) on worldwide assets; non-residents are subject to
ISF only on their French-located assets. Professional assets are
exempt from ISF, as are financial investments realised by
non-residents...
...Assets are subject to ISF if net value exceeds Ffr4.70 million in
2001 (euro720,000 in 2002). Rates of taxation are shown in the table
at right.
For resident taxpayers whose worldwide assets were less than Ffr15.16
million in 2001, the total individual income tax and wealth tax should
not exceed 85% of the taxpayer's taxable income....
So, it appears that if you are a resident of France, you are taxed on
all worldwide assets. If you are a non-resident, you are only taxed on
those assets in France. And in either case, only if your assets exceed
the threshold for that year.
The French Embassy page talks about the wealth tax:
http://www.info-france-usa.org/intheus/tax/fit.asp
"WEALTH TAX
Wealth tax (impôt de solidarité sur la fortune, ISF) is an annual tax
chargeable to individuals with respect to the holding of their
property when the net value of their property exceeds a certain
amount.
I - TAXABLE PERSONS
Individuals domiciled in France or who own therein property, and whose
property's net value exceeds FF 4 700 000 (the limit applicable in
1998) on 1st January of the year of taxation are subject to wealth
tax.
Persons domiciled in France are taxable on property owned in and
outside France.
Persons domiciled outside France within the meaning of French domestic
law are only taxed on property owned in France.
The tax is assessed by household which consists of spouses or persons
living under a common-law marriage and any minors for which they have
custody.
II - ASSESSMENT BASIS
- The assessment basis includes all property, rights and securities
forming the property of taxable persons on 1st January of the year of
taxation (developed or undeveloped land (immeubles bâtis ou non
bâtis), sole proprietorships, farming businesses, furniture, financial
investments, cars, aircraft, yachts, etc.).
However, certain assets are fully or partly exempt, i.e. mainly
business assets (sole proprietorships effectively managed by the
taxpayer and interest equal to, or higher than, 25 % held by the
managers, literary and artistic copyrights, certain rural assets,
antiques, artworks and collection items.
Moreover, the financial investments of persons not domiciled in France
for tax purposes are expressly tax exempt.
The following categories are not considered as financial investments
(and are therefore taxable) :
stocks in companies whose assets consist substantially of real
property, i.e. shares in a company or legal entity the assets of which
consist primarily of real property or real property rights located
within France, in proportion to the value of such assets compared with
the company's total assets ;
holding interests representing at least 10 % of the capital of a
company.
- As a general rule, taxable assets are valued according to the rules
applicable to inheritance (normally, at market value).
III - TAX RATE
The amount of tax is determined by applying a rate (updated every
year) to the assessment basis. On 1st January 1998, this table is as
follows :
fraction of taxable net value applicable rate of property (percentage)
Up to FF 4 700 000 0
From FF 4 700 001 to FF 7 640 000 0.5
From FF 7 640 001 to FF 15 160 000 0.7
From FF 15 160 001 to FF 23 540 000 0.9
From FF 23 540 001 to FF 45 580 000 1.2
Over FF 45 580 000 1.5
For taxpayers residents of France for tax purposes, a system of upper
limit aims at capping the aggregation of wealth tax and income tax of
the previous year to 85 % of the aggregate income. If this percentage
is exceeded, the wealth tax is reduced by the excess. This decrease is
capped for taxpayers whose wealth exceeds FF 15 100 000 in 1998.
The contributions payable since 1 January 1995 are increased by 10 %.
Wealth tax is collected in view of a tax return, accompanied by the
corresponding payment, submitted to the tax collecting office. Revenue
from wealth tax should amount to FF 11 billion in 1998."
So we have the rates for 1998.
If it were not so late, I would call the US office of french Taxation
to obtain the rates you requested for 2000-2003 and I would be happy
to tomorrow at your request. If you like, they are reachable at:
THE TAXATION OFFICE
4101 Reservoir Road, NW
Washington, DC 20007
Telephone (202) 944-6391
Fax (202) 944-6373
E-mail
impots@ambafrance-us.org
Tax Attaché
Christiane Maréchal
The Tax Attaché represents the French Tax Administration in matters
concerning tax legislation and treaties. The "competent authority" for
the exchange of information between France and the United States,
France and Canada, and France and Mexico. The Tax Attaché's office
(Christiane Maréchal -Joëlle Hoffman) is also in charge of resolving
difficulties relating to the implementation of tax agreements between
France and theses countries.
Searching Further, this page has the rates for 2001:
http://216.239.57.100/search?q=cache:kiMl-j2y0Z4C:www.impots.gouv.fr/documentation/pratique/fiscalite/fiscfran_pdf/taxation.pdf+%22French+tax%22+%2Bisf&hl=en&ie=UTF-8
Up to FF 4 700 000 0
From FF 4 700 001 to FF 7 640 000 0.55
From FF 7 640 001 to FF 15 160 000 0.75
From FF 15 160 001 to FF 23 540 000 1.0
From FF 23 540 001 to FF 45 580 000 1.3
Over FF 45 580 000 1.65
So you can see there has been little change in rate from 1998 through
2001 - .05 to .1 per category.
A page called Limerick Leader notes for the year 2000:
http://www.limerick-leader.ie/issues/20000520/business.html
"...Wealth tax known as Impot Sur La Fortune ISF payable. The rate
varies from zero per cent to 1.8 per cent depending on the value of
the property..."
Odd that they note the top tier higher than in 2001. And yet, this
page notes the top tier in 2002 as 1.5%!
http://www.europelaw.com/france/pdf/French%20taxes.pdf
So, perhaps the assessment is becoming a bit less each year.
I was unable to locate exact tax rates for 2000, 2002 and 2003, but at
your request , I would be happy to call tomorrow and post the
additional information as a clarification.
You may also be interested in this article:
http://subscript.bna.com/SAMPLES/der.nsf/9311bd429c19a79485256b57005ace13/517b8bfc4a9eb02685256cf8000c5153?OpenDocument
"International Taxes
French Senate Approves Reform Of Wealth Tax, Extends Action by MPs
By Lawrence J. Speer
Copyright © 2003 by The Bureau of National Affairs, Inc., Washington
D.C.
PARIS--The French Senate, or upper house of Parliament, March 27
approved an initial reading of a proposed economic initiative law,
confirming plans launched earlier this year by the lower house to
reform the national wealth tax for the first time in a decade.
Senators added several amendments to the government's proposed version
that aim to reduce levies from the politically charged "Impot de
Solidarite sur la Fortune" (ISF) on company holdings and
owner-operated businesses.
Junior Minister for Commerce and Small/Medium-Sized Enterprises Renaud
Dutreil accepted the amendments during debate in the Senate March
25-27 on the legislation, which he described as the center-right
government's blueprint for improving the business environment facing
SMEs.
The wealth tax reform was submitted by backbench MPs in early 2003,
subsequently accepted by the government, and first subjected to vote
Feb. 11 in the National Assembly, or lower house of Parliament (29 DTR
G-3, 2/12/03).
If a joint text eventually is approved by both chambers, the reform
would exonerate some business holdings from individual wealth tax
assessment, allow greater deductions for investments in start-ups or
firms in key sectors, such as information technology or
biotechnologies, and otherwise seek to reduce the impact of the tax on
employment and investment.
Individual Application Not Addressed
At the insistence of Prime Minister Jean-Pierre Raffarin, the
parliamentary reform does not address individual application or base
rates for ISF assessment, a long-standing levy on accumulated wealth
in France's 270,000 wealthiest tax homes.
ISF currently is assessed on personal fortunes of 720,000 euros
($776,284), via progressive rates, and is expected to raise revenues
topping 2.5 billion euros ($2.7 billion) in 2003..."
Search Strategy:
"French tax" +isf
"French wealth tax" OR "fortune tax" +"real estate" +US OR USA OR
"United States"
I trust my research has helped to clarify your potential tax
liability. If a link above should fail to work or anything require
further explanation or research, please do post a Request for
Clarification prior to rating the answer and closing the question and
I will be pleased to assist further.
Regards,
-=clouseau=-
" |
