| Pages in topic: [1 2] > | Why are more French companies requesting proof of payment of tax in fiscal place of residence? Thread poster: stephenkells
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Hello all,
over the past 6 months or so I've been asked by three different French clients for proof that I'm 'officially' registered/paying my taxes. I think new regulations are being brought in re e-invoicing in France and am wondering if customers are 'gold-plating' this, asking for documentation that's not necessary and which, as a sole trader who's not VAT-registered, I simply can't provide.
I requested what's called either a certificate of residence or a letter of ... See more Hello all,
over the past 6 months or so I've been asked by three different French clients for proof that I'm 'officially' registered/paying my taxes. I think new regulations are being brought in re e-invoicing in France and am wondering if customers are 'gold-plating' this, asking for documentation that's not necessary and which, as a sole trader who's not VAT-registered, I simply can't provide.
I requested what's called either a certificate of residence or a letter of confirmation of residence (I can't remember the exact terminology) from HMRC, which finally arrived after about three months. This satisfied the most recent client but I now have another client saying that she doesn't think she can legally work with me as I will have done more than 800 euros worth of work for her in this financial year and she seems to think she'll fall foul of these new regulations.
Has anyone else been having these issues? Do we know exactly which legislation/regulation has been changed to give rise to these issues?
Thanks,
Best regards,
Stephen Kells. ▲ Collapse
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A few years ago, I was asked by agencies from France, Spain and Greece for a certificate of tax residence, and each year I had to fill a form for the Portuguese tax authorities to sign and stamp, but then they stopped asking… Anyway, I’m VAT registered.
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Thank you Maria, as I'm not VAT registered I don't have that option to 'identify' myself, as it were. I have just talked with my client as will include my UTR and National Insurance number on future invoices for her and hope that satisfies the French tax authorities.
| | | | Joe France 
United Kingdom
Local time: 22:43
Member (2016)
German to English
+ ...
| Keep your UTR confidential | Feb 22, 2023 |
That certainly sounds annoying and I'm afraid I don't have a solution for you. In the end, I stopped working with agencies and clients that demanding personal tax details. I haven't encountered the issue for a few years and, in any case, I'm now VAT-registered (which, by the way, I've found to be entirely beneficial, but I know it depends on your specific situation).
However, I see you suggested disclosing your UTR, which is one thing I've explicitly been warned away from by account... See more That certainly sounds annoying and I'm afraid I don't have a solution for you. In the end, I stopped working with agencies and clients that demanding personal tax details. I haven't encountered the issue for a few years and, in any case, I'm now VAT-registered (which, by the way, I've found to be entirely beneficial, but I know it depends on your specific situation).
However, I see you suggested disclosing your UTR, which is one thing I've explicitly been warned away from by accountants in the past. Sources online warn against it too:
See:
https://freelancernews.co.uk/do-i-need-to-include-my-utr-number-on-invoices/
"In fact, there are very few reasons why you would ever need to share your UTR number so if prompted to do so, think carefully and double-check first. If your UTR gets into the wrong hands, you could be leaving yourself open to fraudulent crime."
https://www.xero.com/uk/guides/guide-to-utr-numbers/using-your-utr-number/#:~:text=You%20should%20only%20share%20it,a%20tax%20refund%20from%20HMRC.
"Fraudsters have been known to use stolen UTR numbers in their scams, so make sure you keep your UTR number private."
I realise this doesn't solve your issue but thought you might appreciate the heads-up. Could you redact a self-assessment form to satisfy their needs? ▲ Collapse
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Thank you Joe, that's useful to know. Perhaps I'll simply include it on invoices if a customer insists on it but otherwise not write it in. If it's the difference between retaining and losing a client it's a very tricky call to make...
| | | | Tom in London
United Kingdom
Local time: 22:43
Member (2008)
Italian to English
stephenkells wrote:
Thank you Maria, as I'm not VAT registered I don't have that option to 'identify' myself, as it were. I have just talked with my client as will include my UTR and National Insurance number on future invoices for her and hope that satisfies the French tax authorities.
Stephen, you don't need to satify the French tax authorities. You are resident in the UK for tax purposes - not in France. You should have no dealings whatsoever with the tax authorities of any other jurisdiction.
| | | | Daryo
United Kingdom
Local time: 22:43
Serbian to English
+ ...
| Not directly | Feb 23, 2023 |
Tom in London wrote: stephenkells wrote:
Thank you Maria, as I'm not VAT registered I don't have that option to 'identify' myself, as it were. I have just talked with my client as will include my UTR and National Insurance number on future invoices for her and hope that satisfies the French tax authorities. Stephen, you don't need to satisfy the French tax authorities. You are resident in the UK for tax purposes - not in France. You should have no dealings whatsoever with the tax authorities of any other jurisdiction.
Yes, if you're in UK then French tax authorities are none of your concern - you owe them nothing.
But your client in France is very much concerned with what French tax authorities want from them, so it makes business sense to help your client.
as for
"she doesn't think she can legally work with me as I will have done more than 800 euros worth of work for her in this financial year"
the most probable explanation is that 800 euros has been set as a threshold above which "self-employment" is considered by French tax authorities as "disguised employment" (meaning more taxes to pay on the same net amount), "disguised employment" being the kind of tax-saving tricks you can pull easily in UK, but not in France.
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Tom in London wrote:
Stephen, you don't need to satify the French tax authorities. You are resident in the UK for tax purposes - not in France. You should have no dealings whatsoever with the tax authorities of any other jurisdiction.
But his French customer does.
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In France, the tradition is: 'if in doubt, request more documents (even if regulations don't require them)'. There is a 30% withholding requirement for foreign companies that don't provide tax documentation, but only for services 'deployed' in France. Some agencies misread that to mean services carried out abroad and simply supplied to companies in France. If an agency is so bureaucratic and cannot justify why they need certain documentation, I usually decline working for them.
| | | | Tom in London
United Kingdom
Local time: 22:43
Member (2008)
Italian to English
| Same in Italy | Feb 23, 2023 |
Thomas T. Frost wrote:
In France, the tradition is: 'if in doubt, request more documents (even if regulations don't require them)'. There is a 30% withholding requirement for foreign companies that don't provide tax documentation, but only for services 'deployed' in France. Some agencies misread that to mean services carried out abroad and simply supplied to companies in France. If an agency is so bureaucratic and cannot justify why they need certain documentation, I usually decline working for them.
It's the same in Italy. In my experience, Italian accountants specialise in making everything especially bureaucratic as a way of justifying the fees they charge. They represent the state as a malign body that's out to get you, and that can only be kept at bay by feeding it a constant flow of documentation that is made necessary by continuously updated legislation. They may be right; it may not be their fault, because the whole system is designed to be as opaque and incomprehensible as possible. The only way to be sure you're not falling foul of some law or other is to keep producing more and more documentation. If you're not a native of the country this is ten times worse because as a "foreigner" you come in for extra scrutiny.
The UK is easy to criticise but at least the approach here is to aim for simplicity, as much as possible, and for plain language, in all administrative matters. For that reason alone I'm glad I no longer live in Italy, where the admin was a nightmare that required my full attention for 1-2 days of every working week.
[Edited at 2023-02-23 10:23 GMT]
| | | | Tom in London
United Kingdom
Local time: 22:43
Member (2008)
Italian to English
Ice Scream wrote: Tom in London wrote:
Stephen, you don't need to satify the French tax authorities. You are resident in the UK for tax purposes - not in France. You should have no dealings whatsoever with the tax authorities of any other jurisdiction. But his French customer does.
That's the French customer's problem, in which the customer is (seemingly) trying to involve him. I've had clients like this (in Spain and Italy). I usually just drop them.
[Edited at 2023-02-23 10:23 GMT]
| | | | Lieven Malaise
Belgium
Local time: 23:43
Member (2020)
French to Dutch
+ ...
| Over the past few years | Feb 23, 2023 |
Over the past few years I have been asked several times to provide this document (it's called a Tax Residence Certificate). In 2022 there was only one agency left that required it. I always just send it (it's quite easily obtainable in Belgium with a single email request).
But according to my accountant they actually don't need it, which is supposedly confirmed by the fact that I'm not asked for it every single year by all French agencies I work for. I guess they don't understand th... See more Over the past few years I have been asked several times to provide this document (it's called a Tax Residence Certificate). In 2022 there was only one agency left that required it. I always just send it (it's quite easily obtainable in Belgium with a single email request).
But according to my accountant they actually don't need it, which is supposedly confirmed by the fact that I'm not asked for it every single year by all French agencies I work for. I guess they don't understand their own legislation and ask for this certificate 'just to be sure'. ▲ Collapse
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| thank you for all your replies | Feb 23, 2023 |
Thanks for everyone for taking time to reply. The client in question isn't actually a translation agency and is obviously asking these questions in good faith (I skyped with her yesterday). She is also a very good client and work has not been so good recently that I can just lightly 'drop her'. France is unfortunately a very inflexible administrative landscape at times and that is not going to change any time soon. Thanks again!
| | | | Marjolein Snippe
Netherlands
Local time: 23:43
Member (2012)
English to Dutch
+ ...
I am routinely being asked for this by some good clients (even though other clients in the same country do not seem to need this). Whether or not my clients have misunderstood the obligation does not matter to me - I just apply for a certificate of fiscal residence from the Dutch tax authorities. In the Netherlands, this is very simple and the certificate usually arrives within a few weeks.
It looks like it may be just as simple in t... See more I am routinely being asked for this by some good clients (even though other clients in the same country do not seem to need this). Whether or not my clients have misunderstood the obligation does not matter to me - I just apply for a certificate of fiscal residence from the Dutch tax authorities. In the Netherlands, this is very simple and the certificate usually arrives within a few weeks.
It looks like it may be just as simple in the UK - have you looked at this website?
https://www.gov.uk/guidance/get-a-certificate-of-residence ▲ Collapse
| | | | Jo Macdonald
Spain
Local time: 23:43
Italian to English
+ ...
| Certificate of incorporation | Feb 23, 2023 |
Hi Stephen
I had this the other way round being resident in Spain and working with a British company and the Spanish authorities were happy with a British certificate of incorporation, which I think you can download from Companies House.
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