How foreign companies have to manage the withholding tax in France?

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ASD GroupServicesHow foreign companies have to manage the withholding tax in France?

How foreign companies have to manage the withholding tax in France?

The withholding tax introduction in France

From 1st January 2019, withholding tax will come into effect in France. 

The income tax of employees whose fiscal residence is in France will be directly deducted from the salary after deductions of social contributions by their employer. The tax deducted will then be paid back by the employer to the French Tax Office.

The employer will now be classified as a "collector" of income tax.

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Extend the role of the social representative.

This new standard extends the role of ASD Group as a social representative.

As part of this role, ASD Group's mission is to represent companies with no permanent establishment in France. As a result, ASD Group is in charge of all French social obligations, including tax liability, as of 1 January 2019.

In compliance with this tax obligation, the represented companies must appoint a tax representative or tax representative established in France and certified by the French tax authorities.

However, the following companies are exempted from appointing a tax representative companies established :

  • in the EU
  • or in a State part of an European Economic Agreement
  • or in a State which has signed an administrative assistance agreement with France to combat fraud and tax evasion and a mutual assistance convention for the recovery of taxes

Although these companies are not required to appoint a tax representative, they are advised to appoint a tax agent in France.

POINTS TO REMEMBER

Représentation fiscale
  • The withholding tax will come into effect on January 1, 2019 for all employees working in France, regardless of whether the employer is established in France or not.

  • A foreign company has to appoint a social representative for the withholding tax

Do you need a social representative for the withholding tax?

How ASD Group can help you

As a social representative and tax representative accredited to the French administration, ASD Group can take care of all the formalities relating to withholding tax.

Remember to anticipate the withholding tax, and contact our experts right now to define your needs and obligations.

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