Tax disputes in France are a challenging reality for many individuals and businesses. These conflicts, often complex, arise from disagreements with the tax authorities regarding tax assessments, penalties, or other fiscal matters. However, proactive management and a strategic approach can turn this challenge into an opportunity to optimize your tax position. This article explores common causes of tax disputes, outlines the procedural steps, and provides effective solutions to resolve them.

For non-residents with assets or investments in France, effective wealth structuring is a critical priority. This process, aimed at optimizing tax advantages and securing asset transmission, requires a thorough understanding of French and international laws. In this article, we explore the strategies and legal tools available to structure wealth while complying with current regulations.

Tax disputes can arise unexpectedly, whether from an audit, a reassessment, or an unjustified tax claim. Acting promptly is crucial to avoid financial penalties and secure your rights. A skilled tax lawyer can significantly enhance your chances of success by navigating the complexities of tax laws and administrative procedures. In this article, we’ll explore the importance of hiring a tax lawyer during a tax dispute and outline the steps to effectively resolve these conflicts.

For expatriates with financial interests in both France and the UK, wealth structuring is crucial. From cross-border taxation to inheritance planning, expats must optimize their asset management to reduce tax burdens and secure their financial legacy.

Proper structuring ensures that international assets are protected and legally optimized for tax efficiency. Whether managing rental income, dividends, or estate planning, a strategic approach is essential to navigating the complexities of Franco-British taxation.

Selling company shares refers to the transfer of ownership from one shareholder to another person, an existing shareholder, or even the company itself.

This process is different depending on the type of company:

• SARL and SCI (private limited companies or real estate investment companies): Share transfers are subject to strict legal approval.
• SA and SAS (public limited companies): Shares are freely negotiable unless otherwise stated in the company’s statutes.

Understanding these differences is crucial before proceeding with a sale.

Understanding the root causes of disputes is crucial for finding an appropriate resolution.

1.1 Strategic Differences in Business Direction

Over time, business partners may develop conflicting visions: one may want to diversify the company’s activities, while the other prefers to focus on consolidating profits.

➡️ Example: In a tech consulting firm, one partner wants to invest in AI-driven solutions, while the other worries about financial risks.

1.2 Unequal Contribution to Business Operations

A lack of clear role definitions can lead to dissatisfaction and resentment.

➡️ Real-life scenario: In an SCI, one partner manages tenant relationships and property maintenance while others remain passive investors.

1.3 Financial Conflicts: Profit Distribution and Capital Contributions

Financial disagreements are a leading cause of disputes, including:

• Unfair distribution of profits.
• Disagreements on additional capital contributions for business expansion.

1.4 Decision-Making Deadlocks: Majority and Minority Power Struggles

Power imbalances can escalate tensions:

• Majority abuse: The majority partner imposes unfavorable decisions on minority partners.
• Minority obstruction: A minority partner blocks key strategic decisions.

Property depreciation is an accounting method that recognizes the natural decline in a property’s value over time due to wear and tear. While this reduction in value is not immediately visible, it can be used to offset taxable income.

In the context of an SCI, depreciation applies to:

• The property itself (structure, roofing, walls).
• Improvements (major renovations, insulation, etc.).
• Fixed equipment (heating systems, elevators, electrical systems).

It is important to note that depreciation does not apply to the land on which the property is built, as land is considered a permanent asset that does not depreciate.

Why Is Depreciation Important?
For example, if a building is valued at €300,000, instead of deducting this cost all at once, you can spread it over 30 years (€10,000 annually). Each year, this €10,000 reduces your taxable income, effectively lowering your tax burden.

An SCI (Société Civile Immobilière) is a real estate investment company that offers several advantages for wealth management and transfer. Key reasons to consider creating an SCI include:

• Simplified Wealth Transfer: Distributing shares over time allows for a reduction in inheritance taxes.
• Succession Planning: Ensures smooth property management and aligns ownership with estate goals.
• Flexible Management: Provides shared control among partners, reducing administrative burdens.

Dividends received by non-residents in France are subject to a 30% withholding tax, which can be reduced under specific conditions established by tax treaties. For instance, the France-UK tax treaty allows a reduced withholding tax rate for qualifying individuals.

Non-residents must also ensure timely declarations to avoid penalties. Engaging a tax lawyer simplifies the process and ensures compliance.

In the UK:

• Detailed customs declarations
• Fiscal representation requirements
• Transfer pricing documentation

In France:

• TVA registration
• Economic Operator Registration
• Customs documentation