This Blog discusses the problems of the British expatriate pensioner in France & Europe. If you are concerned then it is essential that you write to your MP or a Minister. Links to find your MP, and ideas for a letter are at on the right below. You can also comment or email the blog author -- see profile.
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This is a slightly abridged version of the original - informants and copies not disclosed. (n.b. - when first published here, this item carried, by accident, an inappropriate date of 2012 - our apologies!)
Mr. Richard Thomas,
Tax Treaty Team, 100, Parliament Street, London, SW1A 2BQ
December 2nd 2009
Dear Mr. Thomas,
I wrote to you on July 20th a detailed letter and you courteously acknowledged that letter on the 4th August, saying that I would receive a fuller reply in due course. I still await that reply.
The letter of July 20th has a background essentially of the old Convention (DTC) (UK/France) then and now in part at least, still in force. It also refers to the new DTC of 2008.
Nothing materially has changed but I have been pursuing the case.
You must be aware that I have presented a Petition before the EU Committee on Petitions, who have acknowledged my petition and I await further news in that regard. The details of that petition can be read on my blogsite. I pray that when you do so, you take cognisance of the situation, mentioned in the petition, where if all income were taxed in France I could derive benefits from the tax rebates on employment of a home help and contributions to a French Charity to support the education of a boy in Cambodia. Because of the interpretation of the DTC these rebates are denied to me, since the income tax is paid to the UK!.
For all these reasons my total tax bill is somewhere about 1,000 euros higher than it would be for a Frenchman in the same circumstances.
In the meanwhile....
I have been in correspondence with an international tax specialist with regard to the French interpretation of the taxation procedures in the proposed 2008 Convention.
The Articles of the New Double Taxation Convention mentioned above are in spirit identical to the same Articles of the previous Convention (1968 No. 1869) The outcome is little different from that which I have previously stated. Nevertheless I am informed that the French are likely under DTC 2008 to calculate the tax due in a slightly different manner. I suspect that the situation thereby actually worsens for the British Government Pensioner.
[Calculation on income which includes UK Government Pensions].
Gov pensions = A, UK Tax = B
Any French income (or other foreign source income which is taxable in France) = C
French tax is calculated on A+C = D
French tax attributable to A = (A / (A+C)) x D = E
French tax payable is D minus E. [note that it is the attributable tax which is deducted in the calculation, not the actual tax paid! ]
Clearly and it is irrefutable logic - if B minus E is greater than zero ( UK tax less the French attributable tax) then the British National tax payer pays more tax overall than if he was a French National.
Further and again the logic is irrefutable; if a French National had EXACTLY the same career history as myself and therefore the same income and sources of income - then he would pay less tax than myself.
This situation infringes ARTICLE 25 (paragraph 1) on non-discrimination which I repeat here:
Individuals who are nationals of a Contracting State shall not be subjected to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with regard to residence, are or may be subjected.
The case is absolutely clear.
Now again I repeat to you Article 26. 1.
Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the State of which he is resident, OR IF HIS CASE COMES UNDER PARAGRAPH 1 OF ARTICLE 25, TO THAT OF THE CONTRACTING STATE OF WHICH HE IS A NATIONAL.
I have written three times (third time by recorded delivery) to M. Comolet-Tirman [your counterpart] in Paris and have had no reply to any of them. This is also mentioned in my petition to the EU as is my correspondence to yourself.
You are the competent authority of which I am a national.
I have in my EU petition proposed two alternative solutions.
1. To remove in France all calculation relating to the British Government pensions taxable in the UK under OECD recommendations in the French tax calculations - as is the case in Spain and probably other EU countries.
2. To remove all necessity to tax the Government pensions of British residents in France in the UK, thus causing them to be taxable in France.
I repeat to you, Mr. Thomas, that it is the bounden responsibility under International Law for the British Government to uphold the interests of me, a British Citizen, and to intervene with France to correct this unfairness and irregularity. I demand, with the right of a British Citizen, that action is taken.
I give you official notice in this mail of my contention as required under Article 26.1 of the convention.