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Old 30th Aug 2007, 14:52
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fullish
 
Join Date: Apr 2006
Location: France
Age: 49
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DJS

We work with many pilots working for British Airways and Virgin Airways...

Under the terms of the current tax treaty of 1968 between France and the UK, the salary paid to a pilot flying on international flight is taxable in the country where the company is based.

Therefore a pilot who is a French tax resident and who works for a UK based company (international flight) will be exempt from French income tax on his UK salary.

However France will take into account the net Uk salary in order to determine the rate of taxation applicable to French taxable income.

In fact, the salary is exempt in France and in the UK (rule of the remittance basis). There are a double exemption.

This was a quite good situation for pilots but not for the French tax administration.

Under the new tax treaty, if it enters into force, the double taxation will ve avoid by granting a tax credit on the French side.

This means that France will tax the UK salary and it will grant a tax credit which is equal to the UK tax. As the UK tax is nearly nill, this means that the UK salary will be entirely taxed in France!

That is why our UK pilots are very worried and try to find another solution for the future

In your case, I think you can try to be a French tax resident until the new treaty enters into force.

We have just one case where the tax administration refuse to apply our interpretation of the tax treaty. We are still waiting their onswer to our claim.

For the moment , we have no news.
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