http://www2.macleans.ca/2012/12/17/belgium-to-largish-french-movie-idols-welcome/
Belgium’s foreign minister Didier Reynders seems a jolly fellow. He should be, given that Gérard Depardieu has chosen to live in Belgium and engage in a shouting match with the French government over French income taxes, which are high. Today Reynders gave an interview to the centre-right newspaper Le Figaro, where critics of the socialist president François Hollande are made to feel comfortable.
Dépardieu’s arrival is a good-news story for Belgium, which could use one; Wikipedia’s entry on Belgium’s “2007-2011 political crisis” seems to me to have pretty arbitrary start and end dates. Reynders’ interview catches the longtime former finance minister in an ebullient and cutting mood. On French PM Jean-Marc Ayrault’s use of the word “pathetic” (minable) to describe Dépardieu: “These are words we would never use in Belgium, even when we are very angry.” On the French government’s desire to renegotiate tax collection between the two governments, the gentlest possible No Way: “We’re ready to examine many things, as long as the superior principle of free circulation of people, goods and services within the EU is respected. But if this is about recognizing some French power to tax people who live in Belgium, that’s a whole other matter. Every European country must accept that its citizens decide to live elsewhere.”
A couple of things this article was in Maclean’s magazine written by top Canadian political commentator Paul Wells who said in another article he published today that he was a select attendee at Laureen Harper’s Christmas Party at 24 Sussex. So Wells is big in Canadian political circles. I made two comments one about the situation vis a vis the US and Canada the limited coverage in the Canadian media including Maclean’s and the fact that neither Belgium or Canada have the rejected the US’s self determined right to tax US citizens living in Belgium or Canada respectively. As I said Wells is big and close to PM Harper so comment early and often.
Yet how much does one want to bet that Belgium rolled over to the 800lb gorilla in the room (the USA). Power does buy influence. Yet again another example of why America does what it wants contrary to the rules of international law and each foreign country’s sovereignty.
And the Diaspora Tax War of 2012 spreads to Europe…
Full letter from Gérard Depardieu:
http://www.lejdd.fr/Politique/Actualite/Gerard-Depardieu-Je-rends-mon-passeport-581254 (in French)
Translation:
If Susan Rice can condemn Eritrea for its “diaspora tax” then I think we should start referring to US citizenship-based taxation as the mother-of-all diaspora taxes or monster diaspora taxes or mega diaspora taxes or vampire squid diaspora taxes.
http://usun.state.gov/briefing/statements/2011/178287.htm
Susan Rice to the UN:
“the extortion of a “diaspora tax” from people of Eritrean [American] descent living overseas”
Thank you Ambassador Rice. I could not have said it any better myself.
If confederateH instilled anything in me, it is a deep suspicion of government. To the contrary of what we would like to believe they do, government cannot and will not ever be our saviour. To empower government to do what we as individuals will not do on our own is to weaken ourselves as individuals. Gun legislation is one. If no one carried one because of the evil they carry, we wouldn’t need legislation to restrict them.
85%, my goodness. And what most people (the US Government obviously) is that out of the 15% left, a lot of that is going to be paid in VATs, property taxes and other miscellaneous taxes. I don’t pay 85%, but I’m in a similar situation, especially with the VATs and other taxes.
@geeez, The highest income tax rate in France is currently 41% (the 75% rate starts next year), and including the mandatory social contributions of up to 12% (on any income, not just salaries), the highest tax rate directly on income is 53%. Depardieu probably added the wealth and property taxes, which are on wealth, and VAT, which is on consumption, to arrive at the 85% of his income.
The French government was aware that the multiple taxes could add up, so in 2006 it created a rule that the total tax paid by a person on income, wealth and property (but not including social contributions or VAT) could not be more than 60% of the person’s income. This was called the “tax shield”, and the limit was lowered to 50% in 2007. However, the whole rule was abolished in 2011.
Thanks for the excellent analysis Shadow. They really seem ungrateful. 150 million Euros is a lot of money to pay to a government!
At least Dépardieu’s had the opportunity to leave France without paying huge exit taxes, or having his banking records and income reported by Belgium back to France by some faux tax treaty agreement that France crams down Belgium’s throat, like America is doing with its FATCA IGAs. In this ironic way, the French are really the ones serving up “Freedom Fries”. 🙂 Hope they don’t decide to model the global U.S. Citizenship taxing practices. If they raise their taxes on their homeland too high, at least the French have an option. Belgium is welcoming by practicing “the superior principle of free circulation of people.”
@Just Me, Since last year, France has an exit tax too, on unrealized capital gains. But it only applies to certain stocks and shares of corporations, and it can be deferred or canceled if the new country of residence is within the EU. So Depardieu probably didn’t have to pay an exit tax, as you wrote.
http://www.hlbi.com/index.php?option=com_content&view=article&id=643:french-government-introduces-new-exit-tax&catid=162:tax-updates
@Shadow Raider
Thanks for updating me. You have become our world wide resident taxation expert, and appreciate your response.
@Shadow Raider
Is there a link where French marginal tax rates are explained?
Is the social tax paid by the employer before the employee sees it, or is it part of the employee’s bill?
@Mark Twain, I’ll give you the main source of my knowledge about taxation around the world: Ernst & Young’s Global Executive Guide. It covers in detail the taxation of individuals in 152 countries and territories. The French tax rates are on pages 391-392. Wikipedia’s article on taxation in France is also very good and easier to read. If you know French, there is an official guide from the French tax administration, but I find it way too complicated, like the IRS instructions.
As I mentioned above, the French social taxes apply to all kinds of income, including salaries and investments. They are actually higher on investments (12%) than salaries (8%), the opposite of what most countries do. I suppose that in the case of salaries they are withheld by the employer, but I don’t know how it’s done on investments.
@Shadow Raider
What a fantastic resource the Ernst & Young’s Global Executive Guide is. Thank you for sharing that.
In Norway, the employer pays 14.1 % prior to the employee even seeing his salary number. In Sweden, the number is about 30%.
In comparison to US, which has about 7% paid by the the employer, then another 7% being withheld from the employees paycheck (numbers were lower under the Bush tax cuts).
*I really don’t know why the French are getting so upset about this. It happened just the same in the UK many years ago when the taxes went up, a lot of stars/millionaires moved to Ireland. It’s a fact of life, people don’t like to feel put upon by their governments. I agree that the rich should pay more than others, 50% I call borderline but 75% is just ridiculous. I’m only surprised that more people haven’t followed him.