Before opening a business in France, you must have a residence permit. Also, you will need to set up your tax declaration with the French tax authorities. All businesses must be registered through the appropriate Centre de Formalités des Entreprises (CFE).

An investment in one SCPI is equivalent to an investment in a U.S. REIT. An investment in a U.S. REIT is not an investment in a mutual fund. Therefore, an investment in an SCPI is not an investment in a mutual fund and is not an investment in a PFIC. Examples of U.S. REITs: are Simon Property Group (NYSE: SPG) and Vornado (NYSE: VNO). These are investments in a single stock or company. 

However, it may be invested in a mutual fund that owns a collection of SCPI or REITS, which might be a PFIC. The U.S. example is VNQ, which is Vanguard's ETF for REITs. It does not hold just one REIT. Instead, it holds several hundred REITs. If you have invested in a fund that holds a collection of SCPI, then this may be a PFIC. For more information on PFIC, refer to Passive Foreign Investment Companies (PFIC): Form 8621.

The French banking system provides a wide range of government-regulated savings accounts, such as Livret A, Livret Bleu, LDD, LEP, and Livret Jeune. These accounts come with limits on the deposit amount, but they offer attractive interest rates and are exempt from French income tax and social charges. However, they may trigger reporting requirements for FBAR/FATCA.

To ensure compliance, please complete the Non-US Financial Accounts section of the Tax Questionnaire:

For more information on financial accounts that are required to be reported, refer to French financial accounts reporting.

In addition, please report any interest income on these accounts:

The French Social Security system (La Sécu, short for La Sécurité Sociale), consists of three pillars and five levels:

Notes:

An agreement between the United States and France improves Social Security protection for people who work or have worked in both countries. It helps people who, without the agreement, would not be eligible for retirement, disability, or survivor benefits under the Social Security system of one or both countries. It also helps many people who would otherwise have to pay Social Security taxes to both countries on the same earnings.

The agreement's provisions eliminate double Social Security taxation and permit dual residents to use their work in both countries to qualify for benefits.

U.S. Green Card holders residing in France may elect to apply what is known as the tie-breaker rule of the U.S. - France Tax Treaty and be deemed a resident only of the State (i.e., country) with which their personal and economic relations are closer (France).

Under such an election, the individual would file Form 1040NR and report only income derived from U.S. sources. The requirement to provide full disclosure of foreign bank accounts remains, and tax on income from U.S. sources will be higher than a tax on the same income when applied to U.S. residents filing Form 1040.

Choosing your name after marriage: Regardless of the family name used on French documents, you must provide your family name in the Personal Details > The Basics section of our Tax Questionnaire as shown on your U.S. Social Security card until you officially change your name with the U.S. Social Security Administration.

Report your gross salary as it appears on your Bulletin de salaire or your French Income Tax Return (Form 2042). The Bulletin de salaire is a salary statement commonly used throughout France to provide details about income and expenses, making it the primary document required for the preparation of U.S. tax returns for expatriates employed in France.

To report the total amount of the annual gross salary:

If you received severance or redundancy pay, add the gross amount to the annual gross salary.

Report other types of income such as workplace pension, state pension on Income > Passive Income > Pension and dividends, alimony, royalties, and unemployment on the respective lines of Income > Other Income.

You are considered self-employed in the U.S. if your tax status in France is a sole trader (entreprise individuelle (EI)) or a sole proprietorship (auto-entrepreneur). A sole proprietorship is a business run by a single person with no legal personality, although recorded in the trade directory or register of commerce and companies. 

❗ Important note: if your business structure is a real estate company (la société civile immobilière (SCI)), you must also report this as self-employment. 

Your gross income from self-employment is a turnover of your unincorporated business. To report it, navigate to Income > Self-employment and enter the amount under the question Gross Income from the Self-employment.

Note: income is reported as the gross amount before any deductions; those are reported separately.

The amount of foreign income tax paid or withheld can be utilized as a foreign tax credit to offset U.S. tax liability. Similarly to income, the tax must be reported separately for each type of income on which tax was paid. Income tax withheld from wages is shown as Net imposable (or Tax salaire brut) of your Bulletin de salaire.

To report tax imposed on the particular income type:

The payor may withhold taxes on unearned income, e.g., a bank withheld income tax from dividends, or you may owe tax upon completing the tax assessment form. Report each type of tax paid during the filing year in the respective section of our Questionnaire, even if it applies to income received in prior years.

Wealth tax is not an income tax. It can be deducted on your U.S. tax return as a part of itemized deductions.

The wealth tax on the net worth of French residents with assets exceeding €1,300,000 cannot be claimed as a foreign tax credit but can be deducted as a part of itemized deductions on U.S. tax returns. Please report it in the Taxes And Deductions > Deductions tab of our Tax Questionnaire.

Property tax, sometimes known as land or real estate tax, is a government tax on land and buildings. Please report the property tax in the Taxes And Deductions > Deductions section of the Tax Questionnaire, questions Did you own residential real estate during the tax year? > Did you pay property taxes on the residence?

❗ Important note: property tax on foreign residence deduction was suspended through 2025.

The annual residence tax is imposed on individuals who were residents of a property on January 1st of each year. If you are a tenant of a rental property, you should include this residence tax in your housing expenses.

To do it, navigate to Personal Details > Where I Live > Housing Arrangements, and select Rent under the question Did you rent or own your primary foreign (i.e. non-U.S.) residence during the tax year?

Tax on gains from the selling of property. In the U.S., tax on profits from the sale of the property may be treated as long-term or short-term gains and, in certain cases, tax-exempt.

To report capital gains and losses in the Tax Questionnaire:

To report foreign tax paid on capital gains from the property sale, navigate to Taxes And Deductions > Taxes Paid, click Yes under the question Did you pay any tax to a non-U.S. country on the sale of any capital assets (stock, mutual funds, cryptocurrency, real property, etc.)?, fill in the table and select Property Sale as a tax type.

Life insurance (Assurance vie) is an investment product and does not qualify for tax deferral in the United States. The dividends and interest are taxable in the U.S.

To report any interest income in the Tax Questionnaire:

If you participate as a sole or partial owner of another type of a small business company of other types (SARL, SA, SAS), then please indicate that you own more than 10% of a foreign corporation as you start the Tax Questionnaire. Income/loss from any entity should be reported on Income > Corporation & Trust > Entity List.

A: For example, a U.S. citizen files a joint tax return in France with their nonresident spouse. In the U.S., the U.S. citizen files a claim that married filing separately and files Form 1116.

On the French Income tax return, the U.S. citizen's net salary is €100,000, and the non-resident spouse's net salary is €50,000. They report foreign income taxes paid of €33,000. It is necessary to allocate the French income taxes paid to arrive at the proper amount relative to the U.S. citizen's income: (U.S. citizen's income / Total income) x French income tax = Income tax allocated to U.S. citizen: (€100,000 / €150,000) x €33,000 = €22,000. The U.S. citizen would convert the Euros to U.S. dollars using the average exchange rate for the year. This amount can be claimed as foreign taxes used for credit.

The Foreign Account Tax Compliance Act (FATCA) is a piece of legislation introduced by the United States government in 2010 to avoid double taxation and prevent fiscal evasion concerning taxes, allowing the exchange of tax-related information. 

There are two FATCA model types.

In 2013, the United States of America and France signed the Intergovernmental Automatic Exchange of Information (the "France IGA" - the Model 1A reciprocal version of the IGA). It means that French financial institutions, generally including funds and their managers, will report information about their U.S. customers' accounts to the French government, which, in turn, will exchange that information with the IRS. The reciprocity means that the IRS will be required to send France similar information about French customers' accounts in U.S. financial institutions. France became the 10th country to join the global FATCA network that took effect on July 1, 2014.

To comply with U.S. FATCA regulations, French financial institutions search their data for indications (indicia) that an account holder may be a U.S. person (U.S. Specified Persons or foreign entities in which U.S. taxpayers hold a substantial ownership interest). These indications include:

Retirement funds (Caisses de retraites) and similar financial entities (Caisses de congés payés) are exempt or deemed FATCA compliant because they are considered to present a low risk of being used by U.S. persons to evade U.S. taxes.

Even though specific retirement plans are exempt from direct FATCA reporting, the FATCA rules applying to individuals were not relaxed. Form 8938 requires reporting by U.S. taxpayers participating in foreign pension plans.

French financial assets exempt from FBAR/FATCA reporting are limited to Social Security, Real Estate Holding, precious metals held directly, and collectibles.