1. Corporate Taxes
A foreign company working in France on a temporary basis, for example for the duration of a production, is not taxable in as much as it has no stable base in France.
2. Value Added Tax (VAT)
Under the standardized European Union VAT system, France charges value added tax on the sale and supply of goods and services in France, regardless of their origin. The tax paid by French companies on the expenses may be offset against the tax on the sales, except for certain items on which the tax is not recoverable.
3. Exemptions from VAT
Films that undergo lab work in France before being exported are exempt from paying VAT. In a broader sense, all goods delivery, «manufacturing» work done in France for a foreign company is exempt from VAT when the product is subsequently exported. For example, dubbing of films or digital special effects, which is considered «manufacturing» work, is not subject to VAT when the work is commissioned by a company based abroad and when the films are exported outside France.
A. Getting VAT reimbursed
The VAT can be reimbursed only to foreign companies that are not established in France and do not offer services within France during a specific calendar year or quarter. Expenditures for which VAT can be reimbursed:
- services rendered in France (rental of space, of equipment, sound stages, sets, etc.) and goods, including film purchased here, for the production of films
- rental of vehicles for the transport of materials
- transportation (air, land, sea) of passengers coming from abroad (in transit)
- transportation of imported merchandise placed under suspended customs regulations. Expenses must be justified by accurate bills.
B. Procedure for getting reimbursed
An application for reimbursement must be submitted within 6 months after the end of the calendar year during which the VAT was payable. The application should include originals of all bills (these will be returned within one month). Nationals from another EC country must send proof that they are subject to VAT in their country of origin. Those whose business activity is established outside the EC must designate a fiscal representative based in France, for example a licensed customs agent, a service company, a bank, etc. Foreign companies established in the EU must send their request through the website initiated by the State in which they are established.
4. Personal Taxation
A. Artists and technicians living outside France
In order to avoid double taxation, i.e. in France and in the artist/technician’s own country, the following conditions must be met.
B. Non-resident Technicians
The clause of a temporary professional mission from a fiscal point of view is as follows. If the following conditions are filled simultaneously, the salary remains taxable in the home country of the salaried employee, as in a “temporary mission”:
- The salaried employee must live in France no more than 183 days in any given 12-month period.
- Wages must be paid by an employer or for the account of the employer that is not a French resident.
- The wages are not to be paid by a stable establishment or a fixed base of the French employer.
If these 3 conditions are met, the salary received by the non-resident employee for his/ her work in France is taxable income in the employee’s resident country. However, when one of these conditions is not respected, the salary from a French source is taxable in France and the withholding at source must be applied. The employer is the only one responsible for the withholding payment. These conditions apply to non-resident technicians including the director of the film. Non-resident Artists International conventions on double taxation include specific rules for the artists. For instance, the US-French tax treaty allows for a 15% withholding of the total wages paid to artists for their professional services provided in France. Royalties paid to the artists and resulting from the film are not taxable in France.
C. Resident artists and technicians
An artist or technician is considered based in France and consequently subject to French income tax on domestic and foreign earnings only if:
•he/she is domiciled in France, or
•his/her main residence is in France and he is physically present in France for 183 days in the calendar year, or
•the major part of his/her professional activity is done in France, or
•the centre of his/her economic interest is in France (location of its main investments, management of its properties, source of its main incomes...).
These rules exist within the context of fiscal accords between France and other countries. Companies based in France are not required to withhold for employees resident in France.