Zieht Deutschland nach? Frankreich will Besteuerung nach Staatsbürgerschaft!

Summary

The French parliament is considering a bill that would introduce taxation based on nationality, similar to the U.S. system, where citizens continue to pay taxes even after moving abroad, if they were residents in France for at least three years in the past decade. This law would apply income, inheritance, and capital gains taxes, with credits to avoid double taxation. The proposal is based on a 2019 study and could lead to higher taxes for wealthy individuals and businesses. The speaker advises people potentially affected by these changes to explore second citizenships and consult tax experts for planning.

Takeaways

• 😀 The French Finance Committee has introduced a draft law proposing taxation by citizenship, similar to the U.S. tax system.
• 😀 The proposal would require French citizens to continue paying taxes in France if they move to a country with 50% lower tax rates than France.
• 😀 The law would tax worldwide income, including income tax, inheritance tax, and capital gains tax, with foreign taxes credited to avoid double taxation.
• 😀 French lawmakers argue the proposal is compatible with EU law, though some parliamentarians question the impact on existing double taxation agreements.
• 😀 If passed, this law could inspire other EU countries to implement similar taxation policies, especially if it aligns with EU regulations.
• 😀 The French National Rally and left-wing parties support the proposal, while Macron's party and the Republicans oppose it.
• 😀 The law would be part of a broader strategy to impose higher taxes on high earners and corporations in France, targeting those making over €250,000.
• 😀 The speaker advises individuals to seriously consider acquiring second citizenship to avoid being trapped by such tax policies in the future.
• 😀 Individuals should plan ahead, as changes to tax laws can come too late to prevent negative impacts on those already affected.
• 😀 Professional advice is available for those looking to reduce their tax burdens, protect their wealth, and explore options for relocating abroad.
• 😀 The speaker emphasizes the importance of proactive planning to ensure financial freedom and avoid being overburdened by increasing taxes in the EU.

Q & A

What is the proposed law in France regarding taxation based on citizenship?

The proposed law suggests that French citizens, even if they live abroad, would remain subject to French taxes if they were tax residents in France for at least three years in the last ten years. This would apply to various taxes, including income tax, inheritance tax, and capital gains tax.

How is the taxation model in France similar to that of the United States?

The taxation model in the U.S. requires citizens and green card holders to pay taxes regardless of where they live. The proposed French law mirrors this system, where citizens living abroad would continue paying taxes in France under certain conditions.

What happens if a French citizen moves to a country with significantly lower tax rates?

If a French citizen moves to a country where the tax rate is at least 50% lower than France, they would still be required to pay taxes in France. However, the taxes paid abroad would be credited against the French tax liability to avoid double taxation.

Are the existing double taxation agreements affected by this proposal?

The authors of the proposed law believe that the current 129 double taxation agreements that France has signed would not be negatively affected. However, some lawmakers argue that these agreements would need to be renegotiated.

What is the potential impact of this law on other European countries?

If the French law passes, it could inspire other EU countries to adopt similar tax systems. There is a possibility that this model may spread to other nations, especially if it aligns with EU law and proves effective in France.

How do the political parties in France view the proposed tax law?

The proposed law is supported by the extreme left, the extreme right, and Marine Le Pen's party, the Rally National. However, parties like President Macron's and the Republicans oppose it. The bill is still under debate and could be modified before a final vote.

What are the broader tax policy trends seen in France and other EU countries?

There is a growing trend in EU countries to increase taxes on wealthy individuals and high earners. For example, the French Prime Minister has already proposed higher taxes for those earning over €250,000 annually, and similar proposals are seen in other EU countries, like Germany, where the SPD advocates for higher taxes on the richest individuals.

Why is it important for successful individuals in the EU to plan ahead for these tax changes?

It is important for successful individuals to plan ahead because once the laws are passed, it may be too late to mitigate the impact. These changes could significantly increase tax burdens on high earners, so proactive planning can help protect assets and reduce liabilities.

What role does dual citizenship play in protecting against these tax changes?

Dual citizenship can serve as a protective measure, allowing individuals to avoid the tax burdens imposed by their country of origin. Acquiring a second citizenship and possibly renouncing the original citizenship could provide legal options to mitigate these new tax laws.

How can individuals seek professional advice on managing their tax liabilities and future planning?

Individuals concerned about the tax implications of these changes should seek professional advice. The script suggests consulting with a specialized law firm that can guide clients on acquiring dual citizenship, reducing tax liabilities, and ensuring financial security in a changing tax environment.