French domestic tax law requires that a pension (retraite) of
French source française - that is when the paying entity is
domiciled in France - is taxable in France when it is paid to
a non-resident.
So, in the absence of a Tax Treaty, every pension paid by a
caisse de retraite or employer is generally taxable in France.
However, those paid to Jersey residents are not taxable under
article 11 of the Tax Information Exchange Agreement of 2009 in
force on 22nd October, 2011.
What would otherwise happen, following changes made in the Loi
de finances pour 2020, pensions continue forthe moment to be
subject to a withholding tax calculated at progressive rates
of 0 %, 12% and 20% which is only partially discharges the
liabilty, and need to be completed and if necessary topped up, or
reimbursed, on an annual return filed in the year following
payment.
For information, that system of partial discharge will be
repealed for pensions paid in 2021 and 2022. Lastly, as
from 1st January 2023, the witholding taxation is to be
replaced by a final French Pay As You Earn deduction, a little like
ITIS. It may require an annual return to be filed as well to
confirm the rate of deduction
In any event, these pensions like every other French source
income paid to non-residents, will be subject to a minimum rate of
taxation at 20% which increases to 30 % after 27.519 € taxable
income.
Like most domestic tax rules, these are subject to modifiction
under applicable tax treaties or equivalent agreements.
Whilst Jersey does not have a full tax treaty with France, the
TIEA or adminstrative assistance agreement between France and
Jersey agreed in 2009 stipulates an exemption for pensions from
French taxation under the rules set out above, and limits tax to
Jersey Income tax when the pesnion is paid to a Jersey
Resident. The rules are diffet fro those resident but not
ordinarily resident in Jersey.
What is interesting is that "rentes" are exempted from French
taxation. Itistherefroe possibel for certain type sof insurance
polciies paying a mixture of capital and income out to benefit from
the exemption, if you believe that you can get a better deal from a
French insurer or broker.
Jersey : accord du 19 mars 2009, entré en vigueur le 11
octobre 2010 (décret n° 2010-1265 du 22 octobre 2010) dit
"Décret n° 2010-1265 du 22 octobre 2010 portant
publication de l'accord sous forme d'échange de lettres entre le
Gouvernement de la République française et le Gouvernement de
Jersey relatif à l'échange de renseignements en matière fiscale et
à l'imposition des pensions (ensemble une annexe), signées à Paris
le 12 mars 2009 et à Saint-Hélier le 19 mars 2009 (1).
Article 10 Pensions
1. Pensions, annuities and other similar remuneration arising in
Jersey and paid in consideration of past employment to any person
who, under the laws of France, is liable to tax therein by reason
of his domicile, residence or any other criterion of a similar
nature shall be taxable only in France. Notwithstanding the
preceding sentence, if such pensions, annuities and other similar
remuneration or part of them are not subject to tax in France under
the ordinary rules of its tax law, they may also be taxed in Jersey
within the limit of the amount not taxed in France.
2. Pensions, annuities and other similar remuneration arising in
France and paid in consideration of past employment to any person
who, under the laws of Jersey, is liable to tax therein by reason
of his domicile, residence or any other criterion of a similar
nature shall be taxable only in Jersey. Notwithstanding the
preceding sentence, if such pensions, annuities and other similar
remuneration or part of them are not subject to tax in Jersey under
the ordinary rules of its tax law, they may also be taxed in France
within the limit of the amount not taxed in Jersey. Article 11
Mutual
However the French contributions sociales are not affected by
the TIEA as the agreement does not apply to them. They
are not included in the list of taxes contained in article 3.