Fiscal Representative in France: Duties, Costs, Appointment

An Obligation Arising from Section V

The appointment of a fiscal representative in France is one of the cumulative conditions of the elective payment deferral under article 167 bis V CGI, alongside the proposal of guarantees and compliance with annual reporting obligations. This appointment is mandatory for any taxpayer transferring his or her tax domicile to a State not covered by section IV — which includes the United Arab Emirates.

Who May Be Appointed

The fiscal representative must:

• Be established in France (domicile or professional establishment);
• Be authorised to receive, in the taxpayer's place, communications relating to the assessment, collection and litigation of the tax (Article 167 bis, V-1 of the French Tax Code (CGI));
• Have accepted the engagement, that acceptance being recorded on Form 2074-ETD.

The fiscal representative is a mere intermediary between the administration and the taxpayer: he cannot, in that capacity alone, be pursued for payment of the taxes owed by the taxpayer (BOI-RPPM-PVBMI-50-10-30, § 160). In practice, two categories of representatives are common: specialized French tax attorneys (full professional coverage) and fiscal representation companies (standardized services at controlled cost). More rarely, a relative may be designated, but that solution exposes the personal relationship to the contingencies of the procedure and is not recommended for substantial estates.

Duties of the Fiscal Representative

During the Term of the Deferral

• Receipt and forwarding of correspondence from the French tax authorities to the expatriate taxpayer.
• Coordination of the filing of follow-up forms 2074-ETS1, ETS2, ETS3 and ETSL (with, since 2019, an exemption from annual filing where the deferral covers only unrealised gains).
• Notification to the tax authorities of events that may trigger partial or total loss of the deferral (transfers, gifts, redemptions, liquidations).
• Monitoring the value of the guarantees if they relate to securities or real property whose value may fluctuate.

In the Event of Audit or Litigation

• Receipt of audit notices, proposed assessments, and formal notices.
• Coordination of the response to the tax authorities in conjunction with the taxpayer and his or her tax attorney.
• Forwarding to the taxpayer and his advisers of the elements needed to lodge, within the statutory deadlines, administrative appeals and, where applicable, litigation.

Cost of the Engagement

The cost of a fiscal representation engagement depends on the complexity of the file (number of security lines, presence of unlisted securities, interposed structures) and the anticipated duration of the deferral:

Appointment and Formalization

The fiscal representative is designated on Form 2074-ETD filed, with the guarantee proposal, with the non-residents' tax office no later than 90 days before the transfer (Article 41 tervicies A of Annex III to the CGI). The designation includes:

• The name or corporate name and the address of the designated fiscal representative.
• The indication, on that same return, that the representative accepts the engagement.
• The mention of his authorisation to receive communications relating to the assessment, collection and litigation of the tax.

Change of Representative During the Deferral

The taxpayer may change fiscal representative during the deferral: the initial designation remains effective for as long as the deferral has not expired and no new representative has been designated. The designation of a new representative is made on plain paper, sent to the non-residents' tax office (BOI-RPPM-PVBMI-50-10-30, § 170).