According to 20minutes.fr :

« Le problème principal, c’est que la fiscalité américaine est basée sur la nationalité, en contradiction avec les règles de l’OCDE, estime l’eurodéputée française Virginie Rozière. L’Erythrée a voulu faire pareil et a été sanctionnée. Il n’y a pas de raisons de traiter les États-Unis différemment. Ils ne se comportent plus comme un grand frère bienveillant mais comme un acteur sans foi ni loi qui cherche le rapport de force. Si on n’est pas capable de répondre, on se fera écraser ».

Translation (based on Google Translate):

"The main problem is that the US tax is based on nationality, in contradiction with OECD rules," said French MEP Virginie Rozière. "Eritrea wanted to do the same and was sanctioned. There is no reason to treat the United States differently. They no longer behave like a benevolent big brother, but as a faithless, lawless actor who pursues relations based on force. If we cannot respond, we will be crushed."

How can France prevent the US from enforcing their laws on US citizens?

  • 4
    France cannot prevent the US from enforcing its laws on its citizens, nor does anything in the quoted material suggest the contrary.
    – phoog
    Jul 7, 2018 at 3:42
  • The answer is definitely going to have to do with bilateral treaties. The US has bilateral tax treaties with other countries to facilitate tax collection and avoid double counting. France absolutely can prevent the US from enforcing its laws on dual French-US citizens living in France (e.g. no extradition, no tax collection, no information sharing), the question is if it chooses to.
    – Eremi
    Jul 7, 2018 at 3:59
  • 1
    Hasn't the material suggested the answer? Sanctions. The problem is, it is difficult to enforce sanctions on the US in a meaningful way.
    – Evgeniy
    Jul 7, 2018 at 7:09
  • @phoog Actually there is a hint at it: Du coup, lorsqu'en 2015 la France promulgue un decret pour respecter la loi FACTA (suite un accord conclu en 2013), Suddenly, since in 2015 France issued a decree to enforce FACTA (after a 2013 agreement). Forbidding French banks from providing the data about their customers to the USA would make the IRS unable to assess taxes.
    – SJuan76
    Jul 7, 2018 at 16:21
  • @SJuan...and subject those French banks to punitive taxes on any transactions involving the US financial system, extracted from the funds as they leave the US system...
    – DJohnM
    Jul 7, 2018 at 18:24

2 Answers 2


In General

U.S. tax law is the first and biggest barrier. It is unlikely that U.S. expats in France would face U.S. taxation in practice, and when it is owed, the tax burden is likely to be very modest.

Earned income of expats up to a substantial threshold is exempt from U.S. income taxation ($104,100 USD in 2018), and the foreign tax credit reduces any U.S. tax that is due by any tax paid abroad to a foreign government.

In general, the higher income and passive income taxpayers who are potentially subject to U.S. taxation, since their income isn't entirely excluded from U.S. income taxation, pay higher tax rates in France than they do in the U.S. So, no net U.S. tax is due. The tax rate on a typical high income earner in France is 58.1%, which is typically more than enough to eliminate U.S. federal income taxation (with a top tax bracket of 37% in 2018) through the foreign tax credit (and of course, expats are not subject to U.S. state and local taxation because they don't reside in any U.S. state or locality).

(The estimate above isn't quite right because it doesn't break the total down by types of tax, French social insurance and wealth taxes aren't eligible for U.S. foreign tax credit treatment, but French income tax rates still exceed the top U.S. income tax bracket at 71,899 Euros as of 2017 at which point the marginal income tax rate is 40% and the top French income tax bracket is 45%, both of which still exceed the top U.S. income tax rate; someone with less than 71,899 Euros of earned income would have that income excluded from taxation under U.S. law. Also, at lower incomes where French income tax rates are lower, U.S. income tax rates are also lower.)

The U.S. estate tax burden could be a form of double taxation at the death of an expat, but that only impacts U.S. citizens with more than $11,180,000 USD individually or married couples with more than $22,360,000 USD. No doubt there are a few dual French-US citizens who have to worry about that, but not many. And, there would be at least partial offsets for taxes due at death in France, even then.

Tax Haven Income

The sort of scenario where a French-US citizen would be most likely to face U.S. taxation would be one where the French-US citizen has unearned income from financial accounts in the Cayman Islands or some other tax haven that is not subject to French taxation based upon territoriality (i.e., subject to exception discussed below, France does not tax income earned abroad by French citizens) but is subject to U.S. taxation due to its citizenship based taxation. The U.S. income taxes due on this income would not benefit from any foreign tax credit because no taxes are paid in the Cayman Islands or similar tax haven on this income.

However, while France purports to have a territorial tax system, it actually taxes the global interest and dividend income of its citizens just as the United States does, so only unearned income that is not of that character would be subject to U.S. taxes but not French taxes, further narrowing the gap and the number of people paying extra U.S. taxes.

This is not a very sympathetic bunch of oppressed French-US dual nationals. It is also a group of dual nationals whom the U.S. does not need the cooperation of the French government to impose taxes upon, since the information relevant to the income would not be controlled by the French government, or even available to the French government.

Also, the dual French-U.S. citizens intending to benefit from these tax havens could probably fairly easily arrange to indefinitely defer taxation of this income by setting up some Cayman Islands companies to hold these assets without too much of an undue burden. The holding companies might need to invest, in part, in operating businesses in the Cayman Islands rather than merely passive investments to circumvent some of the more direct "foreign personal holding company" tax rules in the U.S. But, the tax law passed in 2017 that took effect mostly in 2018 makes it easier than it used to be to defer taxation of or eliminate taxation of foreign income.

  • 1
    The general conclusion is probably sound but many details are wrong. The top income tax bracket in France is 45%. If I am reading the article correctly, 58% is the take-home pay and you have to include things like mandatory contributions to the health insurance system (but do those count?) to arrive at a 42% effective rate for “typical“ high-income earners. Incidentally, why would financial accounts in tax havens be exempt from French taxation?
    – Relaxed
    Jul 9, 2018 at 6:29
  • 1
    @Relaxed I think the tax haven suggestion concerns US taxes; that is, it should read "...indefinitely defer US taxation...." The key point is that for most people "the tax burden is likely to be very modest." The real burden of FATCA for US expatriates seems not to be tax burdens, but administrative burdens, especially having to spend a lot of money on accountants and, perhaps more worryingly, difficulty finding banks willing to serve them.
    – phoog
    Jul 9, 2018 at 17:40
  • @phoog Good points but I was thinking about another paragraph, “[…] unearned income from financial accounts in the Cayman Islands or some other tax haven that is not subject to French taxation based upon territoriality“
    – Relaxed
    Jul 9, 2018 at 17:47
  • @Relaxed I've edited the answer after some additional research to clarify the point.
    – ohwilleke
    Jul 9, 2018 at 18:10
  • @ohwilleke Thanks, I upvoted the answer but I think there are still a couple of minor issues. 58% is not the tax rate but the take-home pay (i.e. it corresponds to a 42% tax rate). The same source quotes 60% for the US (for a NY resident), which is coherent with slightly lower taxes in the US.
    – Relaxed
    Jul 9, 2018 at 18:23

The answer is that it cannot and, as @phoog noted, nothing in the material quoted suggests that it should or would. The text is hinting at undefined “sanctions” so action at a diplomatic level to nudge the US into changing its laws itself. Not that this has any chance to be effective or even be attempted at all in this particular case.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .