The EU has asked France to amend how it calculates personal income tax for taxpayers who receive income from foreign sources.
The European Commission said that under the current rules, taxpayers resident in France and earning part of their income in another member state of the European Economic Area (EEA) cannot benefit from the same personal and family tax advantages as are applied to income earned in France.
Taxpayers who fall into this category are also unable to benefit from any refunds or deferrals of tax credits for income from foreign sources when they are in deficit.
The Commission said that as a result of these provisions, France is in breach of its obligations under the freedom of movement of workers, the right of establishment, and the free movement of capital articles of the Treaty on the Functioning of the European Union and the Agreement on the EEA.
The Commission said that France must comply with its request within two months. Failure to do so could result in France’s referral to the European Court of Justice.
Cardwell Advisory Desk