Taxation rules vary depending on the nature of your activity, the duration of your stay in France, whether or not a tax agreement has been concluded between your home country and France...
Country of taxation, withholding taxes
Tax residency is determined by various factors:
- the country where you have a permanent home or where you stay the longest;
- the country where you have your closest personal relationships (spouse, family) and/or the centre of your economic interests (country from which you get most of your income);
- country of your nationality.
All activities conducted in France are subject to income tax. To avoid the risk of non-recovery, income earned in France by persons or companies residing outside France is subject to a withholding tax.
This deduction is made by the debtor (the employer or the purchaser of an artistic performance taking place in France) on the sums due.
To avoid double taxation in France (via withholding tax) and in the country of tax residence, bilateral tax agreements have been concluded between France and some countries.
If an agreement has been signed between France and the country of residence, you need to refer to the relevant provisions to check what rules apply in your case:
- Performing artists (hired directly by a French organisation or artistic services provided to a French venue by an organisation established outside France): article on artists and sportsmen (usually Article 17 or 18).
NB: This is the article to refer to for the "film actors, singers, dramatic artists, choreographic artists, variety artists, performing musicians, songwriters, backup artists, conductors, orchestral arrangers, and for the execution of their artistic conception, stage directors...".
In the absence of a specific article related to performing artists, it is due to refer to the clause concerning employees or self-employed, depending on the type of remuneration.
- Technicians: article on employment (usually Article 15).
- Author artist (visual artist, etc.): article on independent professionals (usually Article 14) and copyright (usually Article 12).
Amount and calculation of withholding tax
The basis of the withholding tax is the gross amount of remuneration paid, after deduction of an allowance of 10% for professional fees (we therefore cannot deduct actual expenses).
The withholding tax rate is 15%.
For an artistic performance provided by an organisation established outside France to a French organiser: for the calculation of the withholding tax, the amount of the remuneration for artistic activity materially taking place in France should be isolated from the total amount billed, which may be greater.
The withholding tax levied at the rate of 15% excludes the application of personal income tax to the extent that it does not exceed the upper limit for the 20% rate mentioned in Article 182A of the CGI ("Code général des impôts") (€41,658 for 2015). Below this threshold (annual amount of remuneration), the artist is not required to pay any other income tax in France. The annual remuneration exceeding this amount is taxed at progressive rates.
However, the artist, must declare all income received in France on the "déclaration annuelle n°2042" (annual declaration) and the total amount of the withholding tax paid on foot of that income.
The remuneration of technicians is subject to withholding tax rules applicable to wages and salaries.
Basis of the withholding tax: The employer or the debtor calculates the withholding tax on the net taxable amount, after deduction of 10% for professional expenses.
The withholding tax is calculated in increments at rates of 0%, 12% and 20% (for an activity in the DOM (French overseas territories), 8% and 14.4% applies to salaries paid to non-residents).
When and how to pay the withholding tax?
The withholding tax must be applied upon payment of sums owed by the debtor.
The payment of the withholding tax must be made by the tax office located in the debtor’s place of establishment no later than the 15th of the month following the payment of the sums involved, accompanied by a declaration of the withholding tax (n° 2494) in duplicate.
Where the debtor has no establishment in France, the withholding tax is payable to the non-resident tax office.
Foreign companies that are not established in France organising artistic performances taking place in France are subject to VAT in France.
If the "recipient of services" in France is subject to VAT
VAT is directly paid by the purchaser of the goods or the recipient of the services if they have a VAT number in France ("reverse charge" mechanism).
The foreign structure does not charge VAT, but issues an invoice bearing the words "reverse charge".
Companies established in the European Union
The European service provider must file a European Service Declaration with their tax authorities by registering the amount of the billed services and the VAT number of the customer on an electronic portal.
If the "recipient of services" in France is not subject to VAT
The foreign company charges VAT and is required to report the provision of services and pay the applicable VAT in France.
Companies established outside the European Union
The foreign company must appoint a tax representative (subject to VAT in France) to meet their obligations to the business taxation authorities. The representative is responsible for tax and accounting obligations in relation to VAT of the non EU-based provider.
Companies established in the EU and in the following countries: Argentina, Australia, Azerbaijan, Georgia, Iceland, India, Mexico, Moldova, Norway, Republic of Korea, Saint Barthélémy
The foreign company can register online with the French administration or appoint a proxy. Appointing a proxy does not relieve the company of its responsibilities vis‐à‐vis the tax authorities.
If the provider is not subject to VAT
The operation does not fall within the scope of the tax; the service provision must therefore be charged exclusive of VAT.