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Slush fund? France reports on ‘reserve’ cash

A report released on Friday showed French lawmakers spent thousands in tax payer money last year on things like fishing and baton twirling clubs. The revelations come from a first ever accounting of a unique French parliamentary power.

Slush fund? France reports on 'reserve' cash
French lawmakers revealed on Friday how the spend €90 million per year in tax money. Photo: Joel Saget/AFP

For decades members of both chambers of French parliament have had at their disposal a sizeable pile of money that, with a minimum of hassle, they can hand out to organizations or towns of their choosing (including their own) each year.

The parliamentary reserve, at its called, was €90 million last year for the National Assembly, which on average came out to €130,000 per MP depending on his or her seniority. They spent €81.6 million of it in 2013.

Yet until a new report came out on Friday that accounted for each euro, there had never been a public explanation of how the money was being spent, French magazine Challenges reported. Yet the parliamentary reserve was first established as a practice in the Assembly in 1958.

According to the National Assembly website "These subsidies, offered by MPs, help finance investment in local projects…and also support the activities carried out associations."

In fact, many French institutions do benefit from the cash. For example, France’s Conseil d’Etat, the government’s top legal advisor got €250,000 from the president of the Assembly, who in addition to his €520,000 slice of the reserve last year and wielded €5.5 on behalf of the assembly. There was also much money put towards new gymnasiums or schools. 

But is all the money really being used how the rules intended? Here The Local looks at some of the strange, funny and potentially problematic recipients of the cash.

  • Deputy Laurent Wauquiez of conservative UMP party, gave a €1,000 subsidy to a car modification club (Raucoulestuning). He handed the same amount to a baton twirling club.
  • UMP Deputy Eric Ciotti, an apparent fan of the French lawn game pétanque,  gave out €11,000 to six clubs who specialize in the game.
  • Deputy Claude Bartolone, a socialist and assembly president, gave €100,000, on behalf of the assembly, to the Danielle Mitterrand Foundation. The human rights group was founded by the wife of former socialist president François Mitterrand.
  • Deputy Gilbert Collard, a member of far right party National Front, gave €40,000 to an organization that, according to media reports, is run by someone who worked with his electoral campaign. 
  • UMP Deputy Jacques Myard gave €1,000 to a fishing association called "L'épuisette du Vésinet" or the Net of Vésinet, which is a small northern France town.

  • Deputy François Sauvadet of the Nouveau Centre party gave €107,000 to Vitteaux, the town he represents. The sum amounts to about €100 per resident of the tiny east France village.

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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'.

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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