Industrial and commercial professional benefits in the French income tax return. (Section 5(B) of the supplementary declaration forms No 2042 NR and No 2042 C)
For the purposes of personal income tax, industrial and commercial profits are considered to be those obtained by individuals from a commercial, industrial or craft profession exercised in France, even if the head office of the person exercising this profession is located in a foreign country.
Without prejudice to the provisions of the relevant international tax treaties, when you have received income from this type of activity, you will have to declare it to the tax authorities in France.
If you are covered by the scheme applicable to very small enterprises (“micro-enterprises”), you must enter your turnover or income and any capital gains or losses directly on supplementary income tax return form No 2042 C.
If you rely on the normal system of real profits, you will have to enter the accounting result on the supplementary declaration form No 2031 or under the heading “Régime du bénéfice réel”. [Régimen del beneficio real] of Section 5(C) of supplementary declaration form No 2042 C, depending on whether or not it is affiliated to an approved management centre.
In the year of your departure from France, you must declare the sums received in France on supplementary declaration form No 2042 NR.
For further details, please refer to the information sheet attached to the income tax return or to the website impots.gouv.fr.
Persons who simultaneously exercise commercial, industrial or artisanal activities in France and foreign countries must include in their income tax return all the sums earned (Article 158-4, paragraph 2 of the General Tax Code), without prejudice to the application of the provisions of the relevant international tax conventions.
Non-professional industrial and commercial profits (Section 5 (C) of the supplementary declaration forms No 2042 NR and No 2042 C)
This is income obtained from activities that do not involve the personal, continuous and direct participation of one of the members of the tax family unit in the performance of the acts essential for the execution of these activities. Industrial and commercial non-professional profits are therefore considered to be those obtained by:
– non-professional lessors of furnished real estate (persons not registered in the trade register as lessors in this category, as well as companies or persons with an annual income of less than €23,000 for whom this activity does not represent an amount exceeding the income received by the family tax unit from wages and salaries, industrial and commercial profits, non-commercial profits, agricultural profits and managerial remuneration);
– non-professional co-owners of interests in racehorses and equine stallions; and – any other industrial and commercial activities which are not carried on in a professional capacity.
If you have received income in this category, you must declare it in order to be taxed in France, subject to the provisions of the relevant international tax treaties.
In the year of your departure from French territory, you must complete Section 5(C) of supplementary declaration form No 2042 C. Any sums received before then must be entered on supplementary declaration form 2042 NR.