France – Withholding tax and Brexit – Registration of UK companies

Overview

To comply with tax withholding requirements, companies must register with the tax authorities and obtain an ID tax number (SIRET). In addition, non EU entities must appoint a tax representative in France, either a French entity of the group, or an accredited representative (third party). What is the change?

As from January 1st, 2021, UK companies already registered , or in the process of registering, for French withholding tax (PAS or PASRAU) , would be considered non EU entities due to Brexit.

The French tax authorities have expressly and officially confirmed it will grant a tolerance for UK companies such that they can be considered exempt from having a tax representative.

What does the change mean?

The French tax administration announcement is binding and allows UK companies the same relief as EU companies, facilitating the registration and withholding procedure for PASRAU and PAS.

Deloitte’s view

The tolerance announced by the French tax authorities will permit to avoid an additional administrative burden for the UK companies willing to comply with tax withholding requirements for their assignees, French resident taxpayers.

Moreover, the French tax administration has been required to add the UK in the list of States authorized not to appoint tax representative so that to legally enforce the decision and secure UK companies’ situation.

 

Nadia Hamya

Nadia Hamya, Partner, has acquired a strong experience in individual tax and international mobility matters. She regularly assists major French and foreign international companies with their international mobility policy, notably […]

Etienne Boyé

Partner in the Global Employer Services department, Etienne has over 13 years of experience in International Mobility. He advises multinational groups in France and abroad in managing their mobile employees. […]

Julie Reynier

Partner, Julie joined Taj in 2007 within the International Mobility team in the Lyon office. With more than 15 years’ experience in International Mobility, she assists companies on all technical […]