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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I run a fishing holiday business in the UK , all customers

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I run a fishing holiday business in the UK , all customers paying with VISA (in total) for Travel via coach (UK Based), and Fishing within our rented compound, including & provided food & fishing .... How should the business be divided according to EU law .... should the business be divided to a UK and FR business .... all persons except the French prefecture are unsure, The French Gov. Accountant actually believes that a UK citizen (max. 3 weeks over 7 trips to France) should pay all the business taxes in France ... SURELY THAT CANNOT BE CORRECT ... !!!
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
If I understand your situation correctly, your are offering a trip that actually takes place in France.
I can see where France says your business is subject to taxation in France because that is where the true nature of the business is offered. The start of the travel to get to the place is not as defining as you would think.
The true offering is the fishing and the stay. The property is in France. If you are making regular trips to France then the business income from that would be subject to tax in France.
As France considers you a non-resident, you are earning income from France , your liability to taxation is going to depend on the terms of any double taxation treaty between France and the UK.
ARTICLE 7 of the tax treaty for BUSINESS PROFITS:
1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein.
It goes on to say though that only the profits that are actually attributable to France would be taxable.
I agree with the French Accountant to the point that you do have an obligation to the French Govt for the taxes on the income you earn in France. You would be allowed a credit in the UK for the taxes.
I would also suggest it may be beneficial to have the 2 accountants at some point speak to one another.
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