It is possible to receive your retirement pension even if you no longer live in France. However, it is important to choose the right country of exile to avoid double taxation.
Going abroad to live your retirement
The French are increasingly attracted by the prospect of living abroad. When they reach the age of retirement. PortugalSpain or Morocco are among the most popular destinations for seniors. They are looking for a better quality of life. Nearly 1.3 million retirees have settled elsewhere in Europe and around the world.
Living from your retirement pension in another country is undoubtedly a real advantage. However, it is important to make sure that the latter has passed a tax treaty with France. Indeed, for the financial aspect to be really attractive, it is imperative to avoid a double taxation.
No tax treaty: what to expect?
Many tax advantages are granted by the host countries to French expatriates. However, this advantageous taxation is not interesting. In the absence of a tax treaty with France. This convention allows to avoid a double taxation. In France, as of January 2019, the retirement pensions will be taxed in three brackets of 0%, 12% and 20%. To this taxation could be added the percentage deducted by the tax authorities of the future country of residence in the absence of a treaty.
It is important to note that the retirement pension of a French national living abroad is exempt from social security contributions such as the CSG and CRDS. The taxpayer must, however, pay health, maternity, disability and death insurance contributions.
The tax treaty, determines the tax regime applied to the income of retirees residing abroad. The presence of this tax can make some countries a tax haven. For French people looking for a new environment. It defines where and how the retirement pensions are taxed. Taxpayers can thus benefit from the tax system of their country of exile if this is the content of the treaty signed with France. Moreover, taxation differs according to the organization that pays the alimony (social security, private organization or public institution). In Portugal, for example, a 10-year exemption is granted for the pensions of private sector pensioners if they are non-habitual residents and reside in the country for more than 183 days per year.
In addition, if a convention exists between France and a foreign country. The provisions defined in the treaty have, in principle, more weight than the provisions of French domestic law. Thus, if an expatriate retiree benefits from the tax system of his or her country of residence, his or her tax domicile is no longer in France.
In short, once the decision is made to leave France for a peaceful retirement abroad. It is essential to inform the pension fund that has proceeded to the liquidation of the pension. The Caisse nationale d'assurance vieillesse (CNAV) must also be informed.