Crisis not taxes pushing French to go abroad

There has been much publicity in recent months about French people quitting their native country in search of happier financial climes, but are they really leaving to avoid high taxes and a rigid labour market?

Crisis not taxes pushing French to go abroad

Thanks in no small part to Gérard Depardieu we have been given the impression in recent months that the notorious French tax man is encouraging thousands to up sticks and say 'adieu' to France.

President François Hollande’s proposed flagship 75 percent tax, the highest levels of unemployment since 1997 and an inflexible labour market are offered up as ready-made excuses for the supposed mass exodus.

But are boats in French ports and planes at Charles de Gaulle airport really full of people desperate to leave to be able to make more money and pay less taxes abroad?

“No, this is a myth,” claims Fabienne Petit director of international activities at French firm Humanis, which works with French expatriates in the area of health cover and insurance.

“It’s a real cliché to say that all French people are going abroad for only fiscal reasons. In fact only 17 percent of people leave for financial reasons, so we need to put an end to this myth,” Petit told The Local.

Neither does Petit believe that people leave because of the renowned inflexibility of the French labour market, where permanent jobs are hard to come by.

“The labour market in France is not very flexible for businesses but there is more protection for workers. If they go abroad it’s not because of the French employment system. If you have a CDI (permanent contract) in France then it can be very beneficial.”

However the is no doubt that more and more French are heading to the exits. The number of French people leaving to go abroad increases by 4 percent each year and has jumped 60 percent since 2000.

Petit has noticed however that the on-going financial crisis is pushing people to abroad sooner than they might. Whereas in the past French people would be more likely to leave if they had a job lined up, they are now landing in countries with nothing but their luggage and an open mind.

With the financial crisis squeezing the French economy the number of young people leaving to go abroad has increased by 20 percent.

“Most French people leave for professional motives. They leave because they have an opportunity in their career or for cultural enrichment, possibly to discover another country,” Petit added.

“Many young people go abroad to study believing it will help them find a job or to gain experience that will help them advance in their profession.”

That view is backed by a recent Ifop poll that revealed 27 percent of young graduates see themselves building a career abroad instead of in France.

Retirees leaving for cheaper cost of living

But of the 2.5 million French people living abroad, most have left because they made a “life-choice”, Petit said. But it is not just those with careers in mind who have been forced to leave.

“With the ongoing crisis we have seen a 10 percent acceleration in the number of retired French people moving abroad,” Petit said. “Many older people have difficulties affording to live in France so they leave to go to places like Morocco, where they will have not only the sun but a cheaper cost of living.”

When they leave France, most French expats don’t go far. According to figures from the “Maison des Français de l’etranger” (centre for the French abroad) 50 percent go to other countries in Western Europe.

Of the rest, 13 percent go to North America, 14 percent to Africa, 6 percent to South America and 7 percent to Asia and Oceania, although that number is increasing with the strength of the economies in those regions.

One in two leave with no health cover

But it is not all sweetness and light for the departing hordes. France may have the disadvantage of the highest unemployment levels since 1997 and an economy that is struggling to splutter back to life but there are benefits that many French come to regret leaving behind.

 “A lot of people who leave don’t realize they will not have the same social protection that they had in France. It can be very expensive to have the same kind of healthcare that they had here,” Petit said.

“Their salary might be on average 20 percent higher abroad, but they have to pay a lot of that on getting healthcare and insurance etc so in the end it’s not really worth it.

According to a study by Humanis, one in two expats leave France without health cover and 17 percent end up living abroad without any protection.

“There was a case of a French woman in Thailand with four children. Her husband died and she had nothing. There are also cases of people developing cancer abroad and they want to return but they don’t have cover here either for the first six months.”

Why did you leave?

The Local spoke to two French natives who both quit their country to go abroad for slightly different reasons.

Vincent Le Coz, Nantes, who lives in Rome:

“For me Paris was simply too expensive. For the same salary in Italy I have a much better standard of living. Life is easier here and I am away from the French who self-denigrate all the time.

“Plus I have always been attracted to foreign countries and languages. It has always been an ambition of mine to live abroad.”

Emilie Lopes, Paris, who lives in London:

“I left France to see the world, to experience other cultures and other ways of thinking. I also left to learn English because the teaching of languages in France is not so good.

“It would be easier to return for professional reasons and I miss the lifestyle in France. But I don’t like the French mentality. They complain all the time despite the benefits we have. I will probably come back one day, but not now.”

Lou Garçon, Paris, who has returned after studying in London:

"For me it was simple: I just wanted to get out of France. It was also the climax of the economic crisis which scared me a lot. The atmosphere was tense with Sarkozy as a president and I was ashamed of the way we treated immigrants and how the government spoke about Muslims.
“I did not picture myself making a life here in France. France had always felt a bit closed-minded to me. As a French person in the UK you feel as if you can be anyone, apply for any job and meet all sorts of people. I also had the feeling that I needed to leave France to better appreciate it.
“Now I have moved back and it's a big relief that the political situation is different. I like how French people are always so responsive to everything, on the edge most of the time, but at least they communicate with each other, whereas British people can be so shy sometimes.”

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Do you pay tax on cryptocurrency in France and if so, how much?

Cryptocurrency is big business in France but the rules on the taxation of income from the currency differ to other countries.

Do you pay tax on cryptocurrency in France and if so, how much?

Bitcoin. Ethereum. Tether. Mining. Binance. To the uninitiated, cryptocurrency can sound like a different language. But, in France, it’s big business, with an estimated 3.4 million people reportedly holding at least some “crypto”.

In May, France became the first major European nation to give approval for cryptocurrency exchange Binance to operate in the country.

But this does not mean the country is operating a light touch on cryptocurrency regulations – a fact Changpeng Zhao, Binance’s CEO and founder, recognised at an event in Paris in April to launch a government-backed programme for “Web3” start-ups.

As cryptocurrencies become more mainstream, more and more people may be looking to get on board. But, is it taxable? How is it taxable, and how much tax do you have to pay?

First things first: yes, cryptocurrency income is taxed. It’s income. It’s taxable.

The tax rate applicable for capital gains and income from crypto assets depends on whether you’re a professional trader, an occasional investor or a miner.

France’s Direction Générale des Finances Publiques (DGFiP) says that capital gains from the sale of crypto assets like bitcoins are currently taxed at the following rates:

Occasional investors – flat tax rate of 30 percent, made up of 12.8% income tax and 17.2% for social security contributions

Professional traders – BIC tax regime of 0-45 percent.

Crypto Miners – BNC tax regime of 0-45 percent.

The flat rate for occasional investors applies to individuals with financial investments in crypto assets, and other investment income like dividends and life insurance, not to professional traders. 

The DGFiP will only tax capital gains from crypto when crypto is converted into euros or any other fiat currency, if the total capital gain exceeds 305€ per year.

That means those who only dabble in crypto pay less than those who make their living from it.

The difference between an occasional investor and professional trader lies in how often you “dabble”. 

The more you play the crypto market, the more likely you are to be regarded as a professional trader – in which case the variable rate of 0 percent to 45 percent applies.

The point at which an occasional investor and professional trader isn’t obvious – that decision is made on a case-by-case basis – but the DGFiP’s working out on this calculation is based on the total investment amount, trade volumes, and how often you sell cryptocurrency. 

The more often you do this, the more likely you are to be considered a trader.

Mining, meanwhile, falls under the non-commercial profits regime of the general tax code. For more details, click on the government website, here.

As for declaring any crypto accounts you may have, there’s a special section on your annual French income tax declaration. Transfers into legal tender currency (but not another cryptocurrency), as well as purchases of goods or services using crypto, are taxable.

The overall amount of the capital gain (or loss) for the year must be entered in the annual income tax return, along with the details of the transactions

Fines for failure to declare a single bank account or investment scheme are hefty – from €1,500 to €10,000, with €3,000 being a fairly common penalty. These amounts are applied to each account you fail to declare.