On June 8, 2018, the French-American Bar Association (FABA) held a conference and continuing legal education session in Paris dedicated to tax residence and exit tax issues in France and the United States, in the context of increasing international mobility. The event took place at the Maison du Barreau de Paris, in the Gaston Monnerville room, and brought together attorneys and tax law professionals with an interest in transatlantic matters.
The growing movement of people and capital between France and the United States makes it essential to develop a clear and coordinated understanding of the tax rules applicable in both countries. Differences in the determination of tax residence, the taxation of unrealized capital gains, and the treatment of wealth and holding structures may result in significant tax consequences for individuals and businesses operating across borders.
The conference was structured around a practical case study, illustrating in concrete terms the concepts of French and U.S. tax residence. The speakers examined the tax consequences of relocating from France to the United States, as well as those arising from a return from the United States to France. Particular attention was given to exit tax mechanisms in both jurisdictions, their interaction, and the practical challenges they may raise for affected taxpayers.
Discussions also addressed the tax implications of U.S. trusts for French tax residents or beneficiaries of such trusts. In this context, the rules governing the classification of entities under U.S. tax law were presented, together with their impact on the taxation of income and assets. The speakers also discussed certain aspects of the new U.S. tax law and its consequences for structuring new transactions in the United States.
The conference was moderated by Mr. Jérôme Assouline, attorney admitted to the Paris and New York Bars, who notably addressed U.S. exit tax rules and the tax consequences of trusts created in the United States by, or for the benefit of, French residents. Ms. Fanny Karaman, attorney admitted to the Paris and New York Bars and a member of Ruchelman P.L.L.C. in New York, presented the rules governing U.S. tax residence, the classification of foreign entities under U.S. tax law and the related consequences, as well as the impact of the new U.S. tax law on the structuring of transatlantic operations. Ms. Melissa Pun, attorney admitted to the Paris Bar and a member of STC Partners, explained the concept of tax residence under French domestic law and tax treaties, as well as the French exit tax regime and its interaction with U.S. taxation.
Welcomed with a breakfast, participants were able to engage in discussions with the speakers in a setting conducive to dialogue and professional exchange. Accredited as part of mandatory continuing legal education for attorneys, this conference fully reflected FABA’s mission to foster mutual understanding between the French and U.S. legal systems and to support practitioners facing cross-border tax challenges.