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THE VIEW FROM FRANCE

SARKOZY

France reacts to Sarkozy indictment ‘thunderbolt’

The headlines in France on Friday have been dominated by the charges brought against former French President Nicolas Sarkozy on Thursday night, connected to a funding scandal. The war of words has already begun between supporters and opponents of Sarkozy.

Published: 22 March 2013 09:35 CET
France reacts to Sarkozy indictment ‘thunderbolt’
Former French President Nicolas Sarkozy, pictured in Paris on April 24th, 2012. Photo: Philippe Wojazer/AFP

Causing shockwaves throughout France, former President Nicolas Sarkozy was in Bordeaux on Thursday night officially charged with taking advantage of the elderly Liliane Bettencourt, France (and the world's) richest woman.

The indictment is the latest stunning development in the ongoing “Bettencourt Affair”, a major political scandal which allegedly involves illegal payments to the centre-right UMP party, and Sarkozy’s 2007 presidential election campaign.

There has been no shortage of reaction from every part of the political spectrum, including some pointed allegations against the Socialist government of current President François Hollande.

Henri Guaino, former Sarkozy advisor and speechwriter, on Friday led the charge against the court's decision, telling Europe 1 radio "Judge Gentil has dishonoured French justice." Guaino also attacked the ruling as "unworthy" and "irresponsible."

Sarkozy's lawyer, Thierry Herzog, on Friday told Europe 1 that his client "has suffered scandalous treatment" at the hands of the court in Bordeaux.

For his part, Sarkozy’s former prime minister François Fillon told Le Figaro, “I am amazed by this unjust and incredible decision.”

“I have sent a message to [Sarkozy] expressing my support and friendship. I hope the truth will triumph at the end of this painful period,” he added.

Outspoken UMP deputy Christian Estrosi saw an element of foul play in the charges against Sarkozy, commenting on his own Facebook page, “Everyone will note that this decision comes 48 hours after the indictment of a socialist minister [Jérome Cahuzac]. Without a doubt, this is payback,” said Estrosi.

UMP deputy Lionnel Luca made a separate allegation against President Hollande, telling his Twitter followers, “François Hollande’s only chance in 2017 is to eliminate, by any means necessary, the only candidate who can beat him.”

Amid the angry backlash from Sarkozy allies in the opposition UMP party, there have been counter-charges from Socialist politicians, among them Socialist Party president Harlem Désir who on Friday told Canal Plus television he was “warning the Right not to put any pressure on the courts.”

“It is unacceptable to impugn the probity and independence of the judges,” said Désir.

Socialist Housing Minister Cécile Duflot on Friday criticized "all the screaming and shouting" of Sarkozy's supporters. Duflot defended the integrity of the process, telling BFMTV: "This investigation signifes nothing more than the justice system doing its job freely."

Neila Latrous, author and expert on Sarkozy and the UMP, told The Local that Thursday's development did not spell the end of Sarkozy's political career.

"It's a shock, certainly. But first there will be an appeal by Sarkozy's lawyer, and even if that fails, the case still needs to go before a second judge before Sarkozy might face the prospect of punishment."

Latrous sees UMP allegations about the judicial process as simple political gamesmanship. "It's just an effort to discredit the court and get some political gain from the situation."

"Is it true that sometimes in France judges take on political investigations to make a name for themselves? Yes. And Nicolas Sarkozy would be the biggest prize out there for any judge. But I don't know Jean-Michel Gentil, and it would be impossible for anyone to say he is politically-motivated," she added.

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TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Published: 11 April 2024 11:28 CEST
Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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