Cross-border commuters: filing your French tax return (2020 incomes)

tutorial: filling french tax return for cross-border workers in Switzerland

When you are a cross-border commuter working in Switzerland, filing your tax return in France is not always easy.

The particular situation of these cross-border workers living in France and working in Switzerland implies filling in specific forms (e.g. to change income received in Swiss francs into euros), declaring certain Swiss accounts and life insurance policies taken out abroad or taking into account specific deductions such as the payment of health insurance contributions.

Even if the French tax authorities do their utmost to simplify taxpayers' tax return, the risk of error remains high and the risk of not optimising one's tax is very real.

To make life easier for cross-border taxpayers, Allo-Déclaration Suisse offers this practical guide to help taxpayers with their French tax return step by step and to explain the main principles.

Disclaimer : the tax information presented here is for information purposes only and does not constitute tax advice. Each situation is unique, and only a precise analysis by a tax professional will enable you to optimise your tax return.

Summary
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    Who must declare their income in France?

    Every adult living in France who received taxable income in the previous year is obliged to file a tax return the following year, even if he or she has no taxable income, as is the case for some international civil servants.) If a taxpayer receives income in 2020, regardless of its nature and country of origin, it must therefore be declared in 2021.

    Cross-border commuters are not exempt from this rule, even if they pay tax in Switzerland and have no French income, nor are people who reside in Switzerland if they have received income from French sources (e.g. rental income from a property).

    What is the point of declaring your income in France?

    Be in good standing with the tax authorities

    Whatever the situation of the taxpayer residing in France, a tax return must be filed: the first interest is therefore to be in order with the French tax authorities!

    Declaring accounts opened abroad

    A cross-border taxpayer who has accounts in Switzerland and who does not file a tax return in France is exposed to fines for non-declaration of accounts opened abroad (EUR 1,500 per undeclared account). This concerns bank accounts, 3rd pillar accounts and all life insurance policies taken out abroad.)

    Claiming tax credits

    Some taxpayers will not be taxable in France, as the income is only from Swiss sources. However, in some cases, depending on the individual situation, tax credits may be claimed (if the taxpayer has a home employee, if he has childcare expenses for children under 6 years of age, etc.). In this case, the taxpayer can receive a refund from the tax authorities.

    Also, even if a taxpayer is certain that he or she is not taxable in France, for example because he or she has only Swiss or foreign income and no French income, a tax return can help to recover money. Contact us for more information

    Obtaining the notification of tax status

    Another advantage is that in certain situations where French social assistance is requested, an ASDIR (avis de situation déclarative à l'impôt sur le revenu) can be requested. However, this notice can only be obtained if the taxpayer has filed a tax return...

    Does a cross-border commuter pay taxes in Switzerland or in France?

    Good news: Switzerland and France have signed tax agreements to avoid double taxation.
    A frontier worker will therefore pay his taxes, depending on his situation:

    • only in Switzerland,
    • only in France,
    • either in Switzerland or in France but never for the same income.

    The question now is what tax situation a cross-border worker finds himself in in order to determine the country where he will have to pay his taxes.

    The table below identifies the most common and simple cases.

    For more details on the different tax situations, please consult our guide to the taxation of cross-border commuters in Switzerland.

    Cross-border commuter who is employed in the canton of Geneva and returns home daily Income tax is paid in Switzerland. It is deducted by the employer through withholding tax. yes
    Cross-border commuters who are employed in one of the following cantons: Bern, Solothurn, Basel-Stadt, Basel-Landschaft, Vaud, Valais, Neuchâtel and Jura Income tax is paid in France. yes
    Cross-border commuter who is employed in any other canton and returns every day at home Switzerland yes
    Cross-border commuter staying more than 45 days per year in Switzerland, i.e. the equivalent of one night per week for a 100% job (including cross-border commuters) and having a salaried activity in any canton Income tax is paid in Switzerland. yes

    What is the tax return deadline (2021 for 2020 income)?

    There are several dates, depending on the taxpayer's department of residence.

    01 to 19 Ain, Doubs May 26th 2021
    20 to 54 Jura June 1st 2021
    55 to 976 Haut-Rhin, Haute-Savoie, Territoire de Belfort June 8th 2021
    Foreign countries - May 26th 2021

    How to file your first French tax return?

    In order to file your first tax return in France, you must declare yourself spontaneously to the local tax office so that the French tax authorities are aware of the existence of the new taxpayer.

    What documents do I need to prepare to file my cross-border worker tax return in France?

    An efficient cross-border worker tax return is one where all the necessary documents have been gathered before starting.

    These documents are necessary to indicate the amounts in the tax return.

    The list of documents to be carried is potentially very extensive depending on the taxpayer's situation. The list below only takes into account the main documents.

    Receipt of withholding tax on income received in Switzerland in 2020. employer
    Salary certificate of every employer in Switzerland in 2020 employer
    Health insurance statement for the 2020 tax return showing the total amount of health insurance premiums paid in 2020. Health insurance or CNTFS
    Closing statement for each Swiss bank account held. The interest received must be mentioned on the statement bank
    Amortisation table for each property loan taken out in connection with a (rental) property bank
    Statement of income and property charges for each rental property. This document will be used to complete the property tax return company that manages the property
    French payslip for December 2020 if any member of the household worked in France employer in France
    Pension certificates (AVS, AI, 2nd pillar, French pensions...) pension or disability fund

    Exchange rates to be used for the 2020 tax return

    The French tax authorities determine every year the EUR CHF exchange rate to be applied to income received in Swiss francs in the previous year. This is the official exchange rate.
    In the tax return, this exchange rate that must be applied to Swiss income to obtain the amount in euros to be applied to the French return.

    The exchange rate for the 2020 frontier income tax return to be used is 0.92.

    Why use this exchange rate to calculate tax? A cross-border worker will probably have changed his Swiss franc salary into euros when repatriating his money to France.

    The exchange rate he then used was probably different each time (unless he had a foreign exchange guarantee from his bank).
    However, the French tax authorities set a EUR CHF exchange rate that must be applied to all Swiss source income. This exchange rate is an average of the exchange rates for the year.

    Please note, however, that for 2nd pillar and 3rd pillar purchases, the exchange rate of the day will be used.

    Do I have to file my tax return in one go?

    Fortunately, it is possible to fill in the tax return in several stages. If, for example, a cross-border taxpayer does not have all the information or is unsure of a particular piece of information, he or she can stop the process and return the next day. In principle, the service will have saved all the information previously entered.
    However, some information cannot be changed, such as address or marital status.

    Finally, the tax service allows taxpayers to modify their tax return after validation and after the closing date of the returns for a few months.

    How to file a tax return in France

    General presentation of the official tax service

    The French tax return is made directly online on the official French tax site. It is usually in April that it is possible to begin to fill the tax return. Taxpayers are informed by email of the opening of the next online tax return period if they have already made an online tax return.

    • 2042 tax document is the first document that the taxpayer accesses when he/she starts the tax return process. This central document allows the taxpayer to declare all his income.
    • Depending on the taxpayer's situation, the supplementary and annexed tax return documents make it possible to include the various incomes, expenses and information required for a specific situation. These supplementary and annexed tax return documents are the following:
    2042 C - Concerns income subject to a special tax regime as well as capital gains on the sale of a rental or secondary home
    - Concerns certain charges and expenses that qualify for a tax reduction
    - It is also on this form that health insurance coverage (KVG/LAMal or CMU), as well as the existence of accounts and life insurance policies abroad, must be specified by ticking boxes.
    2042 C PRO - Concerns industrial and commercial profits (BIC), non-commercial profits (BNC), agricultural profits (BA) and income from furnished accommodation.
    2042 RICI - Concerns charges and expenses that qualify for a tax credit: expenses related to energy renovation, childcare costs, expenses for the elderly, etc.
    2042 IOM - Concerns investments that have been made by the taxpayer in overseas territories
    2042 NR - Concerns income received from France by taxpayers who do not live in France
    2044 - Concerns income from unfurnished rental properties
    2047 - Concerns income from foreign sources
    2048 - Concerns capital gains from real estate sales (document drawn up by the notary on the day of the sale)
    2074 - Concerns special financial operations not covered by the cases dealt with in the other annexes and documents.

    French tax return tutorial

    With the Allo-Déclaration Suisse guide, follow the step-by-step instructions of real tax professionals to complete your tax return.

    For ease of use, it is recommended that the appendice documents be completed first and then the 2042 return document.

    Change of marital status during the year

    On the French official tax site, the first questions asked of taxpayers concern a possible change in civil status (marriage, divorce, death or civil union during the year).

    Cross-border tax return tutorial #1

    How do I report a change of address to the tax authorities?

    Taxpayers will also have to report any change of address between the year 2020 and 1 January 2021.

    Cross-border tax return tutorial #2

    Contribution to public broadcasting

    The French tax authorities assume that all dwellings are equipped with a television. If this is not the case, it is important to tick box 0RA on the 2042 document.

    Cross-border tax return tutorial #3

    Declaration of dependants

    In step 2 of the personal information, the taxpayer must provide information on the persons for whom the household is responsible: minor children, adult children, disabled or invalid persons, etc.

    Cross-border tax return tutorial #4

    How to select the appendices to be displayed

    In the main return document, only the appendices that the taxpayer has previously used will appear. To select a new appendice (or to select one that is missing), taxpayers have two options: search for it in the search engine, or click on the "Déclaration ANNEXES" button.

    Cross-border tax return tutorial #5

    For a taxpayer with only Swiss or French source income, only 2 appendices need to be ticked:

    • the box "Déclaration des revenus 2020 encaissés à l'étranger par un contribuable domicilié en France (y compris la fiche d'aide au calcul du salaire suisse net imposable)" (declaration of 2020 income received abroad by a taxpayer domiciled in France, including the "fiche d'aide au calcul du salaire suisse net imposable" (help sheet for calculating the net taxable Swiss salary)), which makes it possible to add the 2047 appendix to the online tax return.
    • the box "Declaration by a resident of an account opened, held or closed abroad (bank account or digital asset account) or of a life insurance contract taken out outside France in 2020 allows the addition of appendices 3916 and 3916 bis to the online tax return.

    Of course, depending on the situation of the household, other appendices must be ticked (e.g. appendice 2044 for anyone with income from property rental).

    Cross-border tax return tutorial #6

    How to complete the 2047 appendice of the tax return

    The purpose of the 2047 appendice is to allow the taxpayer to declare income from abroad (see thearticle 173.2 of the French General Tax Code).

    The French tax authorities have provided a special form for cross-border workers in Switzerland to help them calculate the net taxable Swiss salary in France. This sheet allows :

    • display the official exchange rate used
    • automatically calculate the income in euros corresponding to the income in Swiss francs that is mentioned in the salary certificate.
    • to deduct certain benefits
    • identify the social benefits to be deducted

    What to tick :

    1. In the event that a taxpayer is a cross-border workerIn the 2047 return, he must tick the box "SWISS WAGES"(red arrow below). A taxpayer who has had several employers in 2020 will have to use several forms to help calculate the Swiss net taxable salary.
    2. In the event that a taxpayer receives interest from a Swiss bank account, he/she must tick the box "Des revenus des valeurs et capitaux mobiliers imposables en France" (Income from securities and property capital taxable in France) (green arrow)
    3. If a cross-border taxpayer pays thewithholding tax, he/she should tick the box "Taxable income giving entitlement to a tax credit equal to the amount of the foreign tax" (blue arrow).
    Cross-border tax return tutorial #7

    What Swiss source income should be declared in France?

    Les principaux revenus de source suisse à déclarer sont les suivants :

    • fixed and variable salary
    • any RHT allowances
    • bonuses
    • benefits in kind (e.g. personal use of a car loaned by the employer)
    • certain daily allowances

    All this information can be found in the salary certificate (or salary certificates if the taxpayer has had several employers during the year) which is given to the employee at the very beginning of the year.

    How to calculate your net taxable Swiss salary?

    The French tax service has provided a specific module for cross-border workers to calculate the net Swiss salary taxable in France. On this page, the taxpayer is asked to enter the number of cantons where he/she worked in 2020.

    Be careful to select the right taxpayer, if one of the couple works in Switzerland and the other does not.

    By filling in the box "Number of cantons", a calculation of the net taxable Swiss salary per canton will be possible. In the case where a taxpayer has had several employers in the same canton, you will have to cumulate the amounts indicated by the different salary certificates and consolidate them on the tax return.

    Cross-border tax return tutorial #8

    Income tax return (SWISS WAGES)

    The following screen allows the cross-border taxpayer to enter the various incomes received in Switzerland for each canton in which he has worked.

    Here are some instructions for completing the tax return:

    • Red arrow: indicate here the different employers, with the total number of months paid
    • Green arrow: enter item 8 of the salary certificate (gross salary) here

    Note : the tax document explicitly mentions the deferrals to be made from the salary certificates, in the column entitled "Salary certificate, Line no.". This number corresponds to the numbers that appear on each line of the salary certificates. In this case, it is difficult to make a mistake when reporting on the tax form. It is very important to fill in all the boxes, so that the calculation of the Swiss net income in euros is correct in the tax return.

    On the other hand, it is important to ensure that the salary certificate is correct. Several errors can occur in the salary certificate, which can lead to mistakes in the French tax return. By contacting a tax professional, this type of error can be detected when filing a tax return.

    Cross-border tax return tutorial #9

    The deduction of family allowances in the 2047 document

    If family allowances appear in the taxpayer's salary certificate (line 15 of the certificate), they must be removed by including them in the 2047 document in the box provided.

    How can the CMU (CNTFS) and the LAMal contribution be transferred to the French tax return?

    Cross-border workers who complete their tax return are either affiliated to the French health insurance scheme (CMU - CNTFS) or the Swiss scheme (LAMal). Please note: contributions are not to be declared in the same place.

    • Affiliation to the Swiss scheme (KVG / LAMal) Health insurance contributions under the KVG are deductible from Swiss income. On the basis of the document certifying payment of the premiums sent each year by the Swiss health insurance fund, the taxpayer must enter this amount in the box provided for this purpose.
    • Affiliation to the French scheme (CMU - CNTFS) the CMU contributions are not deductible and must be entered in the box 6 DD of the 2042 tax return.
    Cross-border tax return tutorial #10

    The carry-over of amounts calculated in euros

    Once the document "Revenus de 2020 (SALAIRES SUISSES)" has been completed, the information must be entered on the 2042 return.

    To do this, the following boxes must be ticked:

    • If the taxpayer is a cross-border commuter in the 8 taxable cantons in France (Vaud, Valais, Neuchâtel, Jura, Bern, Solothurn, Basel-City and Basel-Landschaft): tick the box corresponding to the arrow in red
    • If the taxpayer is a cross-border worker in the canton of Geneva : check the box corresponding to the arrow in blue
    • In the case where the taxpayer is a cross-border worker and flight attendant of a company based in Switzerland : check the box corresponding to the arrow in green
    Cross-border tax return tutorial #11

    Exempt overtime for cross-border workers

    This only concerns cross-border workers from the cantons of Vaud, Valais, Neuchâtel, Jura, Bern, Solothurn, Basel-City and Basel-Landschaft.

    To complete this part, it is essential to download the 2041-AE form and have it signed by the employer. For more details on overtime and flat rate or real options, please follow the link above.

     

    Bank accounts to be declared

    All foreign bank accounts that have been opened, closed, or on which there has been a credit or debit movement must be declared to the French tax authorities.

    This concerns both bank accounts opened in a Swiss (or foreign) bank, but also 3rd pillar accounts. These accounts must be declared in theappendix 3916.

    To go further with your French tax return

    This tax return tutorial is not intended to cover all the tax intricacies that a frontier taxpayer may encounter. If you wish to optimise your income tax, entrust your tax return to the tax experts at Allo-Déclaration Suisse.

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