Who among Canadian residents is affected?
The ties between France and Canada are historically strong, particularly with the French-speaking community in Québec and the many French nationals who settle there each year. This cultural closeness gives rise to frequent tax situations: French nationals who move to Canada while keeping property in France, Canadians who invest in French real estate, or Canadian businesses developing their European activities through France.
As Canada is not a member of the European Union, the French rules applicable to non-EU entities apply in full. The appointment of a fiscal representative accredited by the French Tax Authority (DGFiP) may be mandatory depending on the nature and scale of the activities in France.
Real estate in France: obligations for Canadian residents
Canadian residents (whether of Canadian, French or other nationality) who own property in France are subject to French taxation on their French-source income and capital gains.
Rental income: rent received in France must be declared to the French tax authorities. The minimum rate is 20% on net income. Deductible expenses (mortgage interest, works, property taxes) apply under the same conditions as for residents.
Capital gains tax: on a disposal, the tax rate is 26.5% (19% + 7.5% solidarity levy). Progressive taper relief reduces the taxable gain after more than 5 years of ownership (full exemption from income tax after 22 years, full exemption from social levies after 30 years).
If the capital gain exceeds €150,000, the appointment of an accredited fiscal representative is required before the sale. The notary can only release the funds once the representative has certified that the tax obligations have been met.
Canadian businesses and French VAT
A Canadian company — whether an Inc., Ltd or limited partnership — that carries out taxable transactions in France must register for French VAT and appoint a fiscal representative. The main triggering situations are:
- Sale of physical goods to French customers with storage on French territory
- Taxable services (consulting, software, training) to French B2C customers
- Import of goods into France followed by local resale
- Participation in commercial events with on-site transactions
The accredited fiscal representative submits the registration application to the SIEE in Paris, obtains the EU VAT number (starting with FR), and files periodic CA3 returns. They are jointly and severally liable for the payment of VAT owed by the Canadian company.
The Franco-Canadian tax treaty
France and Canada are bound by a tax treaty signed in 1975 and amended by successive protocols. This treaty covers income and wealth tax and provides in particular for:
- Taxation of real estate income in the country where the property is located (France)
- Rules on real estate capital gains — generally taxable in France with a tax credit in Canada
- Reduced withholding tax rates on certain dividends, interest and royalties
- An exchange of information clause between the tax authorities
Like all bilateral tax treaties, this one does not remove the obligation to appoint a fiscal representative or the filing obligations in France. It limits double taxation by allowing French tax to be credited against Canadian tax.
For support with your formalities, consult the list of DGFiP-accredited fiscal representatives.
Appointing your tax representative: the steps
The procedure is the same as for any non-EU non-resident. For an individual selling property:
- Contact the representative several weeks before the planned sale date (minimum 4 weeks)
- Provide identity documents, the title deed, the purchase price history and records of works carried out
- Sign the representation mandate
- The representative calculates the capital gain, files form 2048-IMM and remits the tax to the DGFiP before or at the time of signing at the notary's office
For a Canadian company applying for VAT registration, allow 4 to 8 weeks between filing the application and being assigned the EU VAT number.