Income tax in France?

Canadian in France income tax - foreign tax credits?

• I am a Canadian and have been living in France for the last 4 years. I am now filing both French and Canadian income taxes, although I don't have "significant ties" to Canada I prefer to file just so that there is a record and to keep contributing to my RRSP. In France, on my pay slip, they have the Gross pay and the Net pay, after social charges, CSG, and various other deductions, many of which are required by the government. In France you then declare this Net income minus 10% for deductable expenses as your Taxable income. Now in Canada, what do I declare as my Income - the Gross or the Net or the Net minus 10% as in France? What else is deductible? And what can I use as Foreign tax credits - the tax paid in france - the CSG and other social charges? I think the overall tax rate in France has got to be higher than Canada, for a single with no dependants, anyone have any ideas?

• Answer:

  You ask this quesiton after living in France for 4 yrs. How you have been filing your cdn tax returns, if any, for the last 4 yrs? After 4 yrs away from Canada, it is likely that you no longer have cdn ties: home, social or economic ties, and therefore no longer a cdn resident for tax purposes, because you likely have a house or apartment in France, being paid by a French employer, having french credit cards, etc. In other words, you may be considered as a non resident for cdn taxes purposes. As a cdn non resident, you are only taxable for cdn employment income, for income from carrying on a business in canada, and for income from disposition of taxable cdn property. If you dont have such income FROM CANADA, you dont need to file cdn tax returns. On the other hand, if you have cdn income, and pay cdn taxes, but the French tax law requires you to report this income in your french tax return, you can claim the french foreign tax credit for the cdn taxes paid. In other words, only one country can tax the amount, and the other country has to provide the tax relief to avoid double taxation. You may wish to consult the cdn embassy in France for any cdn taxation problems while in France.