Read news from:
Austria
SHARE
COPY LINK

LIVING IN FRANCE

Are Canadian pensions taxed in France?

If you are considering retiring to France, you might be wondering whether you will still be able to access your Canadian pension and if it will be subject to French taxes. Here is what you need to know.

Published: 26 April 2024 16:20 CEST
Are Canadian pensions taxed in France?
A person holds a Canadian flag beside a statue of Corsican resistance leader Pascal Paoli, in 2022 (Photo by Pascal POCHARD-CASABIANCA / AFP)

Before going any further, it is worth noting that this article is meant to give an overview of the pensions situation for people with Canadian pensions. It does not replace professional financial advice, and Canadians looking to retire in France should still seek out expert financial assistance as needed.

The first step is to determine whether or not you are a tax resident in France (you can look through our guide). All tax residents must fill out a yearly tax declaration, and they must report all global income, even if it is not subject to tax in France. 

You should also consider if you have a pension from another country besides Canada, as different rules may apply based on that country’s bilateral tax treaty with France. Here is the situation for British, American, and Australian pensions, and here is an overview of the system.

Where is my pension taxed?

In Canada, the pensions system includes multiple tiers of public and private schemes, but luckily the double tax treaty between Canada and France is explicit about where pensions are taxed.

The Local spoke with Isaac Barchichat, a registered CPA in France, Canada and the USA to understand the situation for Canadians in France. He is a managing partner at Monceau CPA, an international accounting firm based in Paris with offices in the US and Canada.

He told The Local: “Tax treaties usually follow the OECD model, which means that Article 18 is usually focused on pensions.

“Article 18 for the Canada-France treaty is very similar to the USA-France treaty. This means that pensions are taxed in the country that they are issued in,” he said.

As a result, any Canada-based pension – whether that is the Old Age Security plan, the CPP (Canada Pension Plan) or QPP (Quebec Pension Plan), or a private personal or employer plan (such as Registered Retirement Savings Plans, or RRSPs) – would be taxed in Canada, not France.  

Barchichat explained that Canadians in France should still declare their pension income in France. Like Americans, they will receive a tax credit from France attesting that they have already paid tax in Canada on their pension.

“People should still maintain proof that the pension was already subject to tax, in case of an audit,” he added.

Barchichat also recommended that Canadians resident in France can make use of the ‘mention expresse’ section in their French tax declaration.

“Sometimes French local tax authorities fail to assess foreign income properly. Using the ‘mention expresse’ allows you to specify to French tax authorities Article 18 from the tax treaty to ensure that they process your documents properly,” he advised.

All of this being said, Canadians should beware that their pension income could still count towards your total household income in France, even though it is not taxed here. As a result, it could end up pushing you into a higher tax bracket.

What about social charges?

In addition to taxes (impôts), France also requires people to pay social charges (prélèvements sociaux) on income. However, only specific types of income can be considered for social charges, such as the CSM charge (PUMa) for healthcare. 

The general rule is that pensioners and their spouses do not have to pay the CSM charge, but France specifically exempts people who have a pension from France, the EU, the EEA and the UK (people with S1 forms), as well as their non-working spouses.

There is some debate over whether American and Canadian private pensions ought to be treated as a pension (and therefore exempt from CSM) or as investment income (which can attract CSM charges). 

When it comes to Americans, tax expert Jonathan Hadida from HadTax told The Local: “Under the principle of equality amongst taxpayers, URSAAF has treated most US pensions/IRA distributions/401(k) distributions akin to a French/Swiss/European pension and have therefore exempted Americans with pension income.”

“I have called URSSAF, and I was told by the representative that they should be paying for PUMa. But in practice, I have not seen many American pensioners charged for it.”

It is likely that similar standards are applied to Canadians. 

Barchichat, who is licenced in both the US and Canada, said that in his opinion neither American nor Canadian pensioners should be charged for prélèvements sociaux. 

“If this happens, it is a mistake by tax authorities”, he added. You can learn more about contesting a CSM charge here.

READ MORE: Cotisations: Why you might get an unexpected French health bill

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

BBQs, plants and laundry: What are the rules in France around balconies?

If you want to grill some ribs, install heavy plants or even hang up your laundry to dry on your balcony in France, then there is one document you'll want to consult beforehand.

Published: 7 May 2024 10:43 CEST
BBQs, plants and laundry: What are the rules in France around balconies?

If you live in an apartment building in France, then you might be curious whether there are any rules regulating what you are allowed and not allowed to do on your French balcony.

The answer is relatively simple: it depends on your copropriété. In France, a copropriété is a type of building that is split up into several different apartments that are individually owned. It is also the name of the individuals who together make up the co-owners of that shared building, similar to a ‘homeowner’s association’.

READ MORE: PROPERTY: What you need to know about ‘copropriété’ fees in France

Most of the time your building will also hire a syndic, or managing agents for the building.

Every copropriété should have a règlement de copropriété, which is a written document outlining all of the operating rules of the building, as well as the rights and olbigations of the ‘co-owners’ and tenants.

This document governs the common areas of the building and the fees that go into the building’s maintenance (les charges), but it can also regulate the use of private areas under certain circumstances. For example, the règlement might have its own rules about the hours that you can do noisy renovation work, or a list of colours allowed for the shutters on your exterior windows.

So can I barbecue on my balcony?

As you may have guessed from above, the règlement de copropriété may outline the rules for balcony or terrace usage.

This means that the document can dictate anything from whether or not you can hang laundry outside to the weight of plants allowed and the rules on barbecues.

The gist is that the regulations governing balconies and what you can do on them vary widely from one apartment building to another.

Some apartment buildings allow for people to use small electric grills for barbecues, while others might ban grilling and barbecuing altogether.

When asking about your balcony, be sure to find out whether any parts of it are considered ‘shared space’.

Under some circumstances, the règlement may deem balcony railings to be part of the shared space, which would have consequences for the minimum amount of maintenance required by the owner. Though, this would be most likely to occur if the upkeep of your balcony’s railing has a direct impact on the structure of the building or other apartments.

Similarly, the document might consider the actual concrete slab of the balcony to be the responsibility of the copropriété for maintenance and upkeep. In this case, if you had a crack in your balcony then the repair costs would fall on the copropriété and not you individually.

How do I find out about the règlement for my building?

If you have a gardien (doorman) you can start by asking him/her. They would likely have a copy on-hand, or they might just know the answer to your question.

Otherwise, you can reach out to the building’s syndic, or you can even request a copy of the document from the land registration service. The latter option will cost €30, and you would need to file a formal request (you can find the form here).

How are these rules decided?

The règlement for the copropriété is voted on in a general meeting of co-owners, and it can be changed.

To do this, you would need to gather the ‘general assembly’ of co-owners in the building. Then you would need to vote. Depending on the nature of the change, French law can require that the co-owners in the building reach a simple majority (most owners present vote yes) or an absolute majority (out of all owners, including those not present, the majority vote yes).

You can find the voting rules on this government website.

In general, the items outlined in the règlement will be justified somehow. For example, the rules related to furniture and plant height/weight might have to do with concerns about safety and ensuring that the concrete slab of the balcony holds up.

But that does not mean that ‘aesthetic’ concerns are irrelevant – your copropriété might consider something like hanging laundry to dry from your balcony to be an ‘aesthetic harm’ (or hygienic concern) for your building.

The standard for all French copropriétés is that anything that changes the exterior appearance of the building is not allowed, and in order to do so, you must get special permission.

READ MORE: The rules for installing air conditioning in your French home

What about local laws and rules?

In certain situations, there might be additional local laws and rules that regulate activities you might want to do on your balcony.

For example, when it comes to BBQs, some areas – especially if there is a drought – will ban or restrict them to avoid the danger of starting wildfires.

Certain legal clauses might restrict charcoal BBQs and allow gas ones, while others could restrict barbecuing to certain times. Check with your local mairie to see if there are restrictions where you live.

READ MORE: What are the rules of having a BBQ in France?

Departmental health regulations may also contain rules that would apply to balconies and terraces.

For example, in Paris the health regulations prohibit the storing of flammable liquids, seeds, bread crumbs or food of any kind on windows, balconies and outside parts of buildings.

It also stipulates that anything hanging from a balcony or window should be done so in a safe manner so that it does not create a dangerous environment for passers-by or other building occupants.

Overall, you can do what you want with and on your balcony, as long as you comply with the copropriété rules and existing local or departmental health/safety regulations, you do not alter the external appearance of the building or carry out any large-scale, structural work that you’d need a permit for, and as long as whatever you do/install on your balcony does not create a safety risk.

SHOW COMMENTS