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Living in the Languedoc:    Money Matters and Taxation

 

Currency

Most European countries including France have switched to a common currency called the “Euro” (€). Since January 1, 1999, private and commercial business transactions have been conducted in euros. Cheque accounts in euros became available on September 1, 2001. Franc coins and notes were last released by banks at 23:59 on December 31, 2001. From  January 1, 2002, all contracts in participating countries were converted into, and all transactions carried out in euros. Both French francs and euros were in use until midnight on February 17, 2002, after which the French franc ceased to be legal tender. After that date, only euros were accepted in stores.  From July 1, 2002, French francs can be converted at the Banque de France, (and other currencies from all countries of the euro area at the corresponding Central Bank), for a period of three years for coins, and ten years for bills. Prices are often still quoted in Francs as well as Euros.     

Click on the following link to read an article about the introduction of the Euro in 2002 Next..

Euro Coins. There are 8 euro coins denominated in 2 euros, 1 euro, then 50, 20, 10, 5, 2 and 1 cents.

Every euro coin carries a common European face. On the reverse, each Member State decorated the coins with their own motifs. No matter which motif is on the coins they can be used anywhere inside the 12 Member States. The common European face of the coins represents a map of the European Union against a background of transverse lines to which are attached the stars of the European flag. The 1-, 2- and 5-cent coins put emphasis on Europe’s place in the world while the 10-, 20- and 50-cent coins present the Union as a gathering of nations. The 1 and 2 euro coins depict Europe without frontiers.

Euro Notes. There are seven euro notes of different colours and sizes, denominated in 500, 200, 100, 50, 20, 10 and 5 euros.

The design on both sides of the notes is common to all Member States. All notes will carry advanced security features and are legal tender in all countries of the euro area.

In practice you can also use them to a limited extent outside the Euro area - eg in all European airports.

When using automatic money machines, bear in mind that the Post Office generally charges less for their distributors than other banks.

Banking

Most banks offer Saturday service (10:00 to noon) and are often closed Mondays. Many banks close over the lunch period. On the day before a public holiday, banks will usually close around 11:00 and will remain closed until their next normal working day.

Banking should present no special problems or difficulties. Many banks now have English-speaking personnel who will be pleased to assist with your banking needs.    

If you are going to be working in France and are reading this before your move to France, consider joining your company’s local bank, which has a two-fold advantage.

  • By being “introduced”, you are less likely to be treated as an inconvenience or a money-launderer, and small issues will be more easily resolved.
  • Your account can be opened using your company’s address (no account may be opened without an official French address). 
  • The automatic transfer of your monthly salary will go a bit quicker. Remember, companies in France generally credit your salary to a bank account.

ATMs will dispense euros against your home country credit card for the usual and customary fees - even for cards denominated in other currencies.

  Banking Terminology

Agence  

Branch  

 Guichet

Cash or teller’s booth/counter  

Retrait d’espèces

Cash withdrawal made at the bank counter  

Retrait CB 

Carte bleue cash withdrawal from a cash machine.  

Prélèvement 

Authorized automatic payment.  

Facture carte

Charge made with carte bleue.  
Remise  Funds that have been deposited in the account  
Chèque sur rayon     cheque that has been deposited in the account  
Opération de change Purchase of foreign currency  
Versement Money paid into the account (deposit)  
Virement reçu d’un tiers Deposit made to the account by a third party  
Relevé de compte  Bank statement  
Remise de chèques Deposit slip  
Solde  The account balance  
Jours débiteurs Number of days the account is overdrawn  
Déposer de l’argent   Make a deposit  
 Distributeur Automatique de Billets (DAB) Automatic Teller Machine (ATM)  

French regulations require a bank to stipulate clearly its list of Bank Charges.

To begin any banking procedures, bring your passport and/or carte de séjour along with a France Télécom (telephone) or EDF (electric bill) as proof of residency in France, as well as a bulletin de salaire (pay slip) as proof of employment. A lease for an apartment or house may also be used as proof of residency. If self-employed or otherwise independent in France, you will be required to make a deposit by money transfer before being allowed a chequebook (chequier).

All documents must list your local French address. A joint account must be opened in the two or more names, (X ou Y, X or Y) which allows all of the parties access (withdrawals, cheques, payment orders) individually. An account labeled X et Y (X and Y) requires the signatures of both or all parties for access (withdrawals, cheques, etc.), and so cannot be accessed by a surviving spouse in the event of the other's death.

 

France has also a number of online bank Current Account services. The two most current are run by insurance companies. Their site addresses are www.agfbanque.fr and www.axabanque.fr. You may find them less expensive than the traditional banks. Both of these online banks have current accounts that are remunerated at an interest rate for as long as you maintain a credit balance in the account.  To open an account, contact any office of the respective insurance agent nearest you. You are not obliged to accept any offer of insurance in order to open an account.

As a general rule, banks do not “cash” cheques. Once a cheque is deposited at the bank, the account will be credited and the funds will become available in two or three days, once the cheque has cleared. The cheque must be endorsed on the back before depositing it with a remise de chèques (deposit slip), to be filled out with the following information:

  • Source and amount of each cheque to be deposited
  • Total amount being deposited
  • Number of cheques being deposited
  • Date
  • Code for the agence where the account resides
  • Numéro de compte (account number)
  • Nom et adresse du bénéficiaire (name and address of the account holder)

The same form is used for cash deposits. At some banks, simply give the cheque or cash to the teller along with the account number to be credited. The teller will fill out the form and return a copy for your records. Deposits (cheques or cash) may be made using a carte bleue and the ATM at any branch of your bank. Many banks will accept for deposit cheques drawn on a foreign bank account. (Before opening an account, ask the bank if they provide this service, as well as any additional fees that will be incurred.)

 

 Non-resident Bank Accounts

 If planning to be in France for less than two years, you may prefer to use a non-resident account. With a non-resident account, unlimited amounts may be transferred to and from abroad, or from one non-resident account to another. You may not hold a resident and a non-resident account simultaneously.

 

Debit Cards - "the Carte Bleue"

When opening an account, you may apply for a Carte Bleue (debit card).

There is an annual charge for the card, which is valid for two years. The carte bleue is widely accepted throughout France by retail merchants, hotels, restaurants, service stations, toll booths, paring plazas and practically every business enterprise. Most shops do require a minimum purchase, although toll booths and many service stations have no minimum requirement. You will also need the card to obtain cash from an automatic distributor of any other bank in France.

The Visa or Mastercard international Carte Bleue is accepted wherever the “Visa” or “Mastercard” sign is displayed, as well as at ATMs throughout Europe. Other American credit cards, (American Express, Diners Club, etc.), are less readily accepted.

The French debit card is linked to your checking account and  allows you to withdraw money from any bank or post office cash machine. Cash withdrawals are immediately debited from the account. Purchases are debited either at the end of the month or immediately, depending on the option chosen when opening the account. All debits incurred with the Carte Bleue will appear on the bank statement, and will not be billed separately. Banks generally limit the amount of cash withdrawals and charges allowed per week.

 Keep a record of the card number in a safe place; if it is lost or stolen, you will need the number in order to faire opposition (block the use of the card). A contact telephone number for reporting lost or stolen cards appears on the document issued with any new card. All ATMs also display the number to call in case of loss or theft of a card.

 

International Transfers

There are two methods for transferring money automatically. One is a SWIFT transfer, employing the references found on your RIB and handled directly between the sending and receiving banks. The other is PayPal that can also be used. Avoid Western Union, which has some of the highest transfer costs.    

International transfers can be time-consuming and expensive (about 25€ per transaction). Money transfers, even within France, often take five banking days. Cashing a cheque in foreign currency may take up to ten days and is very expensive -- so to be minimised or avoided.

Many international employees find it easier to be paid by automatic deposit in local currency. Funds can be transferred from a foreign account with a foreign Visa or Eurocheque card. Euros may be drawn from a foreign card at ATMs that accept them, or at a bank. Some banks, like Crédit Lyonnais, will deposit a foreign cheque in an account for a nominal fee. Inquire at the bank where the account will reside about their specific policy.

 

Current Accounts (US checking Accounts, Fr Comptes Courants)

In France it is considered a serious crime to overdraw a compte courant (account from which debits are allowed by cheque or carte bleue) beyond the amount that your bank has allowed as an overdraft limit.

Should you receive an overdraft notification, you will usually be allowed a 30-day grace period to rectify the situation. Otherwise, you will be penalized by ten years’ interdit bancaire (blacklist), meaning that you will not be issued a carte bleue or allowed to write cheques for 10 years within France. This restriction is all encompassing. You cannot go down the street and open a new account with another banking institution: a “restriction” from one bank is automatically transmitted to all other French banks. Because of the serious consequences of bouncing cheques, payment by cheque is readily accepted everywhere in France, often without proof of identification (passport or carte de séjour) unless the sum is over 50€.

Most banks offer a service that links a type of non-checking account to a compte courant; (the name given to an account used for this purpose varies from bank to bank). Funds are automatically transferred into the compte courant as needed and the excess is returned to the non-checking account at the end of each month. It is recommended that you inquire at the bank where the account will reside about available services; merely opening a savings account at the branch will not ensure that the account will be used to cover compte courant overdrafts.

Banks do not return cancelled cheques with the bank statement. Bank statements indicate only the date and amount of cheques presented for payment. Since the name of the beneficiary is not included it is important to record both the amount and beneficiary on the cheque stub each time a cheque is issued. A cheque register is usually included in the back of the chequebook. Regardless of the method used for recording transactions to the compte courant, French law requires banking records to be kept for a minimum of five years, so the name of the beneficiary must be recorded.

Barred cheques (standard issue) cannot be endorsed to a third party by the beneficiary. Post-dated cheques are not recognized legally, and therefore cannot be cashed prior to the date on the cheque. 

How to draw a cheque (US write a cheque): In most large shops the cash register fills in the cheque automatically.  You will be expected to sign the cheque and give it to the cashier. Once the machine has printed the appropriate information, the cheque will be shown to you for your approval.

To the right is a box or line preceded by “€” for the amount to be written in digits. The decimal point is replaced by a comma, (e.g. “365,14€” rather than “365.14€”). To the left are two long lines preceded by “Payez contre ce chèque” for the written amount, including the cents. (It is recommended that a double-dash be placed before and after the amounts to prevent alteration of what has been written.) The third long line, preceded by “à” is for the beneficiary’s name. To the lower right are two lines preceded by “A” (at) for the place of issue, and “Le” (the) for the date of issue. Sign the cheque in the large space on the lower right. Do not make any changes on the cheque.

Some useful tips:

  • Omitting to include information, even the place where the cheque was signed, will invalidate it.
  • Always cross sevens or they will be taken as ones however obvious the top bar
  • Use a decimal point in place of commas and commas in place of decimal points compared to usage in English speaking countries.
  • The date must be written the European way as day/month/year  not the US way of month/day/year
  • If there is a disagreement between the amount written in letters and the amount in numbers, it is the amount in letters that prevails.   

Ordering new cheques. chequebooks usually contain fifty cheques. Most banks will automatically restock chequebooks in the branch where the account resides, on request of a renouvellement automatique. To avoid running out of cheques, use one of the last ten cheques out of sequence (banks automatically order a new chequebook upon receipt of one of the last ten outstanding cheques). If there are numerous outstanding cheques, (which is often the case if many cheques have been voided due to errors), most banks will suspend the renouvellement automatique. Bring or send a signed statement to the branch indicating the numbers of the voided cheques in order to reduce the number of outstanding cheques so that the renouvellement automatique can be re-instated. The RIBs (see “Relevé d’Identité Bancaire”) included in a chequebook can also be used to request a renouvellement de chequier (new chequebook). chequebooks are not usually mailed to your home unless specifically requested (at an additional fee). chequebooks sent to the home arrive by registered mail, and require a signature for delivery.

Relevé d’Identité Bancaire (RIB). This piece of paper contains the name of the bank and branch where the account resides, as well as the account number and name and address of the account holder(s). The French commonly pay regular expenses (i.e. rent, taxes, electricity, gas, and telephone) with an automatic payment directly from their bank account. When filling out a form for automatic payment, a Relevé d’Identité Bancaire (RIB) will be required. There are several RIBs included within chequebooks for this purpose. Bank will provide additional RIBs upon request.

 

Prelévèments (Automatic Debits)

To have recurrent bills paid automatically, you can have the bank establish a prévèlement that will automatically debit your account every month (or other period that you stipulate). The amount is transferred to the bank account of the beneficiary of the debit; for instance, the electricity or telephone company or your landlord (for the rent). PayPal is also available for those who wish to pay by means of their VISA or Carte Blue card.

 

Traveller's Cheques (US Traveler's cheques, Fr Chèques de voyage) in France

Chèques de voyage or “travelers” (travelers’ cheque), are available in different currencies, but must be ordered up to a week in advance. Order foreign currency in advance as well, to ensure that it will be available. If unable to give sufficient advance notice to a local branch, traveler’s cheques and foreign currency can be obtained on short notice from the main branch of most banks in large cities.

Travelers’ cheques, in any currency, are not readily accepted in France. It is recommended that travelers’ cheques be cashed at a bank or exchange office in advance, or that some other back-up form of payment be available when attempting to use them.

 

Loans

Short-term loans (fewer than twelve months) are more difficult to obtain than loans for one to three years. Longer-term loans require the information typically required by lending institutions in your home country. Remember to supply proof of employment and salary. 

    

Investments

Most current accounts do not earn interest on the outstanding balance; deposit accounts pay about 3% interest. Larger sums (over 1.500€) can be invested in a SICAV, which offers a larger return. Contact your local bank for information on current rates and regulations. 

  

 Closing a Bank Account

When closing an account, any unused cheques and charge cards issued on the account must be returned. The account must be closed in person at the branch where the account resides. Make sure that all cheques and overseas charges to any cards issued on the account have cleared and that any automatic payments have been cancelled in writing.

 

 

 

 

 

Cheap currency exchange: http://www.currencysense.info: Save thousands compared to banks on international currency transfers for euros, dollars and pounds transfers, plus info on mortgages and insurance.

 

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