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LIVING IN FRANCE

French government offers €80k grants to attract shops, bars and cafés to rural villages

In attempt to stop the decline of rural communities, the French government has today launched a €12 million scheme that offers grants to entice shops, bars, cafés and other businesses to isolated areas of France.

French government offers €80k grants to attract shops, bars and cafés to rural villages
Rural France. (Photo by SEBASTIEN BOZON / AFP)

France boasted 34,965 communes in 2021, according to official figures.

Not counting the six martyr villages that have mayors but no residents, they range from the smallest, Rochefourchat in the Drôme (population: one – plus castle ruins and a church) to the largest, Paris (population: 2,175,601).

Of those 34,965 French communes, more than 21,000 (62 percent) have no shop, figures collated by national statistics body Insee, show. In comparison, 75 percent of France’s communes had at least one shop in 1980.

The problems are clear. Because there’s no nearby shop – in those sparsely populated areas of France that most people only get to see flash by when the Tour de France is on, the median road trip for daily provisions is 10 minutes, Insee said, compared to less than three minutes in city environments – smaller, rural communes with empty shops are less attractive to house hunters, which in turn makes them less attractive to prospective businesses. 

So the shops stay empty and unmaintained, property hunters stay away. And so the vicious circle turns.

This story of slow rural decline, in contrast to the famous and strangely controversial 15-minute city plans of Anne Hidalgo in Paris, doesn’t usually make the headlines.

READ ALSO What is a ’15-minute city’ and how is it working in Paris?

Last month, the French government launched a €12 million scheme to reverse that trend in up to 1,000 communes, to attract businesses to business-less areas, cut the need for residents in isolated areas to resort their cars, and make life in rural France attractive again.

And, as of Monday, March 1st, businesses were invited to register their interest with a specially set-up registration desk at their local préfectures – which will make their selections to go forward for government consideration.

The State funding is intended to support a permanent multi-service business in a rural village or town with few or no local amenities – for example a combined shop and café – or a mobile business which visits otherwise isolated areas several times a week.

Under the terms of the scheme, candidate villages must be places where any existing local business cannot meet the daily basic needs of residents and must be at least a 10-minute drive from the nearest commercial centre.

Up to €80,000 will be available for a permanent business, and €20,000 for a mobile one, a sum that the government says must be at least matched by the business or commune concerned.

The government has indicated that it would be open to other options depending on the local situation. 

A single-activity business (such as a bakery, for example) would not necessarily be excluded, nor would a plan for the creation of a second business in a commune, as long as it complemented and consolidated an existing operation.

If successful, the scheme may be renewed for 2024/25, targeting more poorly served local areas.

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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.

Are Canadian pensions taxed in France?

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

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