Close

The French tax system

Recommend

It is no secret that France has one of the highest taxation rates in the European Union, even though they do not reach the levels of Scandinavian countries. Before moving to France, it is important to acquaint yourself with the different taxation policies since tax requirements can be significantly different to those of your home country.

For example, it is compulsory for you to declare bank accounts held internationally as part of your tax declaration, and not doing so exposes you to significant fines. If you can afford it, it might be a good idea to book a session with a tax professional to understand how the system works.

Types of taxes

In general, taxpayers in France have to pay the following:

  • income tax
  • social security contributions which are deducted at source
  • value added tax (VAT) which is an indirect tax applying on the basic price of all products and services available in the country
  • housing tax (paid both by the owner and the tenant)
  • property tax (paid by land and property owners)
  • capital tax

Conditions

If you are based permanently in France, you will be required to pay your taxes in France. Things can get slightly complex if you move to France or leave the country in the middle of the fiscal year. If you are in this category, you might have to pay taxes in two countries during the straddling period. However, in general, you will pay tax in France if you:

  • have a permanent and habitual family residence in France;
  • are working in France (but it should not be an ancillary professional activity); or
  • have economic interests based in France.

 Important:

Make sure to check whether your home country has signed a non-double taxation agreement with France. This will exonerate you from payments in your home country and in France. If you have worked part of the year abroad and have paid taxes on your earnings, you will still be required to declare those revenues as the latter will be taken into account for the calculation of your overall taxation rate.

Income tax

All residents in France have to pay income tax, regardless of their source of income. However, the French tax system distinguishes between household income, families with or without children and the single taxpayer. In short, families pay less tax than single taxpayers.

Revenue generally refers to the following:

  • wages
  • investments
  • dividends
  • bank interests
  • all pensions
  • revenue on property

Note that your employer will generally communicate the value of your earnings to the tax authorities (for the years following your first tax declaration). Banks will also automatically communicate the value of the dividends or earnings made on your different accounts. In both cases however, it is your responsibility to ensure that the values communicated are correct and include all your earnings. The law changes relatively quickly with regards to taxes and it is highly advisable to consult the pages of the tax authorities before filing your taxes (see links below). For example, the tax laws were recently changed and it is now compulsory to declare any income you receive from renting out your property on AirBnB.

Tax rates

The rates for 2016 are as follows:

  • A maximum of 9,700 Euros per annum – 0 %
  • From 9,700 to 26,791 Euros per annum – 14 %
  • From 26,791 to 71,826 Euros per annum – 30 %
  • From 71,826 to 152,108 Euros per annum – 41 %
  • Beyond 152,108 Euros per annum – 45 %

First income tax declaration

Income tax is not deducted at the source in France. Therefore, each family has to submit its tax declaration to the tax authorities, either in person or online. You are required to submit your income tax declaration in person in the following cases if you have worked in France during the previous year or if you are more than 18 years old.

To file your taxes, you need to either download the form No. 2042 as from the beginning of May or request it at from the tax office in your arrondissement (Centre des Finances Publiques). Note that e-filing is encouraged and is possible if you are between 20 and 25 years old or you are in possession of an authorisation letter issued by the tax administration.

Fiscal calendar and additional information

Every year, the website of the French tax office publish a calendar which clearly sets out the deadlines for filing your taxes. You will also be provided with further information either on the paper forms which are mailed to you or on the online tax submission system.

Note that it is also possible for you to either call or visit your tax office. The tax office will be assigned to you based on where you reside, and the tax agents are very helpful in answering questions you might have, although it can be somewhat difficult if you do not speak French. Alternatively, you can book an appointment with one of the many English-speaking tax consultants in France. The forms and the filing process is breathtakingly simple, especially when compared to other countries of the world, so the appointment with the tax consultant can simply be a case of understanding how the forms are laid out and what are the general tax guidelines in the country.

 Useful links:

Services Publics – Income tax
Direction Générale des Finances Publiques – The French Tax System
Ooreka

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
Recommend
expat.com Your favourite team
Member since 01 June 2008
Small earth, Mauritius
Write a comment

See also

The French lifestyle is oft romanticised and, for the most part, it lives up to expectations. With great food and rich history, France has a lot to offer.
Travelling to France with your pet involves several health formalities under certain conditions. Make sure to enquire about these beforehand.
As a capital of fashion and arts, Paris has a vibrant culture and nightlife. You can spend your free time soaking in all the best Paris has to offer.
You will not get bored in Lille, with all manner of culture, sport, nature and family activities to engage in.
Sports enthusiasts are in luck, as Paris has excellent sports infrastructure, so whether you want to go for a run or swim, there are plenty of options.

Expatriate health insurance in France

Free advice and quotation service to choose an expat health insurance in France

Moving to France

Find tips from professionals about moving to France

Travel insurance in France

Enjoy stress-free travel to France

Flights to France

Find the best prices for your flight tickets to France

2 million members!

Watch later