French law requires non-resident sellers to appoint a représentant fiscal accrédité des non-résidents on the sale of property in France, if the value of the property exceeds €150,000. The role of this fiscal representative is, in a nutshell, to verify that the correct amount of tax is being paid by the seller related to the change of ownership of the property in question.
Our Editor in Chief, Guy Hibbert, can bear witness to the experience, which can be quite onerous and verging on the surreal. “We sold a house in France in 2012,” says Guy, “and as non-residents we were obliged to appoint a fiscal representative, from the SARF Société Accréditée de Représentation Fiscale, and what a nightmare that turned out to be. Although the fiscal representative are in theory acting on your behalf it doesn’t feel that way. We had to go back and forth endlessly obtaining “acceptable” invoices and declarations by the registered trades people we used, in order for SARF to get the tax authorities to accept that all the renovation work we had done could be deducted from capital gains tax. When it was eventually agreed that we were owed a substantial rebate, it was by then already late 2013. Having accepted the settlement we were then informed that the sum of money due to us had to be held in their bank account for two years, until the end of 2015, just in case the authorities change their mind!”
Good news for EU residents
In order to conform to European directives, effective January 1 , 2015, the appointment of a fiscal representative is no longer required if the seller is a physical person* and a resident of the EU or EEA. At the root of this change was a challenge to a transaction by a Portuguese resident that was brought before the EU Commission on the grounds that the appointment of a fiscal representative constituted an obstacle to the principle of free flow of capital within the EU.
Residents of all other countries
For residents of all other countries outside of the EU/EEA, the requirement remains unchanged. They must appoint a fiscal representative upon the sale of their property in France, whenever the selling price is higher than €150,000 and the length of ownership of the property is less than 30 years. Companies outside of the EU/EEA must always appoint a fiscal representative, whatever the duration of ownership and selling price.
[*In some cases where a property is owned by a company, the fiscal representative is still required.]
The information in this article is provided for informational purposes and does not constitute legal, professional or financial advice. We encourage you seek the advice of a professional before acting on any of this information. Any links are provided as sources and assistance to help you find other resources that may be of interest and do not imply an endorsement of the information contained therein.
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