Whatever country you’re from, when you mention the word “accounts” it tends to illicit a sigh or a grimace. That’s why most companies hand over their receipts and book-keeping to a qualified accountant. But for English-speaking business people who have a company in France, there are a few more reasons to sigh due to the country’s love of bureaucracy and paperwork.
So to help expat entrepreneurs find their way around the French accounts system, we have compiled a list of top five tips for business accounting in France with the expert help of the French accounting firm Action & Stratégie.
1 – State Supervision
Accountancy in France is regulated by law and is government-supervised, therefore French accountants don’t get their qualifications from a university but by the actual state of France. France is the only country in Europe in which auditing and accounting are treated as different professions – the national accountancy body falls under the jurisdiction of the Ministry of Finance while the national auditing body falls under the Ministry of Justice.
That’s why you need to be extra vigilant when it comes to your accounts because the weight of not only the law but the state is on your shoulders. All accounts have to be done in French on French software regulated by the state (no simple Excel files here!) So make sure your accountant has the correct version of the software.
2 – Expert Help
When looking for an English speaking chartered accountant in France make sure you choose an ‘Expert Comptable’. Expert Comptables are fully qualified chartered accountants who are recognized by the French state and are members of the OEC (Ordre des Experts-Comptables).
They must have obtained the DEC (Diplôme d’Expertise Comptable) or an approved EU equivalent supplemented by an aptitude test in French law. Unlike the UK where you can fill in your tax returns yourself or with the help of a book-keeper, only Expert Comptables are authorised to fill in an annual return.
Their job is not only to do the returns but they also have a responsibility to act as an advisor to the company, to make sure the directors and managers are up to speed with new laws or changes that might affect the business. And only a chartered accountant can invoice for accountancy services in France. There are over 30,000 Expert Comptables in France, many of them English-speaking, who are able to help you with your business accounts.
3 – Warning Signs
When you open a company in France, you will probably get a stream of letters advising you that you owe certain amounts to the state. Some of these letters look like junk mail and others look like official documents. But beware – some of the more spammy-looking letters are actually from the tax office and the more official ones are just from unscrupulous accountants touting for business!
However, if you have an Expert Comptable you can hand over all these letters and they will be able to sort the wheat from the chaff and identify the authorized tax office letters and stop you from getting fleeced by lesser accountants.
4 – VAT & Annual Returns
VAT returns can only be submitted online and special access to the French tax office website must be gained first by an authorised accountant before any VAT returns can be assessed.
Timescales and deadlines for VAT are also shorter than in any other EU country – the quarterly VAT return must be done within 19 days after the end of the quarter but if you are paying at least 4000 € VAT per year, you need to do a monthly VAT return which must be done within 18 days after the end of the month
Annual accounts must be done within three months after the end of the financial year. They have to be filed exclusively online with a special software by an authorized organisation or an authorised chartered accountant.
5 – Contracts
If your main company is abroad and you have a branch in France (or as the French quaintly put it – you have a ‘mother company’ abroad and a ‘daughter company’ in France) all business between the foreign mother company and the French daughter company needs a contract. This agreement has to be done in French and it’s advisable to have it registered with the French tax authorities.
For instance, if the mother company is re-invoicing expenses or a management fee, then a contract needs to be written in French, signed and registered so the French tax office can see that everything is above board.
So there you have it – the top five tips to help English-speaking entrepreneurs navigate the French accounting system. So the next time someone mentions the word “accounts” we hope you have a few less reasons to sigh.
This post was written by Katya Puyraud, Managing Partner at Euro Start Entreprises. We work with businesses and entrepreneurs providing company formation and incorporation services in France, UK, US & Emirates.