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Thread: French Tax
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Old 24th Jan 2001, 19:37
  #3 (permalink)  
foghorn
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Red face

There is usually a magic '183 day rule' in tax treaties.

Tax is normally deducted in the country in which your employment is based. However, if you lived in another country for more than 183 days in a tax year, the Inland Revenue of that country can claim income tax and social security payments (a.k.a. National Insurance) from your earnings.

Double taxation treaties mean that you do not have to pay tax on income twice (i.e. to two different countries), if you earn in one country and are resident in another, however you do have to pay tax at the higher rate of the two countries. With the EU countries this almost invariably means that you will pay more tax than the UK!

(For comparison purposes, UK top tax rate is 40%, if I understand you correctly France is 76%. Ouch)

However as Boss Raptor says there are many ways of slipping through the net so you can choose to pay tax to the country with the lower rates. This is the so-called 'tax competition' that the EU wants to outlaw - by forcing the UK's taxes up!