Download tax forms on www.impots.gouv.fr.
General government helpline for tax questions: go to www.impots.gouv.fr. Choose "contacts", then "particuliers" in the first selection box on the page if you are in individual. Then choose the theme for the question. Answers are usually of good quality, whereas local tax offices don't always know all the answers.
Specialised tax helpline for non-residents and expats
The French tax office has a dedicated help desk for non-residents and expats. Their mission is to provide fiscal advice concerning all personal and business taxes. I have had reports that the telephone number is not working any more, yet this information still appears on a government site. If it doesn't work, use the ordinary helpline mentioned above.
1. You plan to return to or move to France
Direction Générale des Finances Publiques
2. You are currently a non-resident or expatriate
Note, an expatriate in this context must be considered someone expatriated from France.
Service des Impôts des Particuliers non résidents
French Income Tax Explained
Disclaimer: The French Tax Code (Code général des impôts, or just CGI) takes the space of two bricks and uses 2000 pages of small print to present nearly 4000 articles. In addition, a separate Book of Fiscal Procedures (Livre des procédures fiscales) outlines the rules for collecting the taxes. I cannot possibly present all that in a couple of chapters. This section aims to explain the very basics of the core of the French taxation of employed persons or married couples with or without minor children at their charge, all persons concerned living regularly in France the entire calendar year and those of them working being employed and paid only by a French employer. In these cases, the calculations below will give you a very precise idea of income tax due. Calculating and paying French income tax is your personal responsibility. This page is not a tax guide and it cannot replace a tax advisor, tax guides or the Tax Code. Different types of income are treated differently, and it is your responsibility to find out how they are taxed. The information below is not exhaustive. The following, non-exhaustive list shows a few examples of cases where you cannot directly use the information below or maybe not use it at all: Divorce, separation, same-sex couples, unmarried couples, couples having signed a partnership agreement (PACS), death, birth, family member living or working outside France, foreign income, persons working for international entities having special status (EU, CERN, ...), diplomats and other consular staff, capital income, retirement, self-employment, running your own business, small or large retailers, authors, artists, nationals who may remain taxable in their own country despite living away from it (Americans and Frenchmen for example).
The French tax year follows the calendar year.
If you are resident in France, then you are taxable on your worldwide income in France to the extent that double taxation agreements with other countries don't give the right to taxation to another country. However, even if such an agreement stipulates that an income is not taxable in France, it must still in the majority of cases be declared in France, because even though it is not taxed, it can affect the tax calculation of your other income in France. This also goes for for example a spouse's income earned and taxed abroad, except if the spouse having the foreign income is living abroad and not in France.
There is no PAYE or other system in France to collect income tax at source. While social security contributions are deducted from your gross salary at source (unless you pay such contributions in another country under EU Regulation 1408/71 or a bilateral social security convention), no tax is deducted. You are personally responsible for saving enough money to pay your tax later. Tax is paid in arrears the year after the income was earned.
Tax calculation - the brief version
Official income tax simulator at www.impots.gouv.fr (in French).
The income tax depends on your personal situation. A number of parts is determined for the family. A single person is represented by one part. A married couple 2 parts. Add 0.5 part for each of the first two children; 1 part for each additional child. For example: Married couple with 2 children gets 3 parts. Single person with 3 children gets 3 parts (Article 194 of the Tax Code).
All income of the persons concerned - the married couple and the children - is added together in one amount. If you pay your social security contributions in France, your employer should tell you which of them are deductible and which amount to declare. If you pay them abroad, you should deduct them from your gross income before applying the tax calculations below. Only declare the appropriate amount net of deductible contributions.
In case of marriage or PACS (civil union) during a tax year, the couple decides whether to file two separate tax returns for that year or one common tax return.
In case of divorce or dissolution of a PACS during a tax year, two separate tax returns must be filed for the year of divorce or dissolution.
I will illustrate the following calculations with an example of a married couple with three children, one parent earning €3,000 and the other €82,000 net after social security contributions.
Divide the resulting amount by the number of parts:
The personal allowance and progressive tax bands (barème) are then applied to the resulting amount. This results in the income tax per part.
For income earned in 2009 (tax payable in 2010), the following barème is applied:
This amount is multiplied by the number of parts
to get the total tax:
For income earned in 2010 (tax payable in 2011), the following barème is expected to apply (Article 197 I 1. of the Tax Code):
Official income tax simulator at www.impots.gouv.fr (in French).
Whereas these tax rates are usually adjusted annually to take inflation into account, it was announced early in 2012 that the existing rates will be frozen for two years. This is effectively a stealth income tax increase, as a salary that only rises with inflation will be taxed more. This also means that even if the salary increases with inflation, the net salary after tax will rise with less than the inflation. It will hollow out the purchasing power.
There is a limit to the tax advantage one can get for each half-part for children (€2,336 for 2010 income; Article 197 I 2. of the Tax Code). In the example, this limit is not exceeded. To know if the limit has been exceeded, one makes two tax calculations: One that includes the parts and half-parts for the children and one that does not include these parts (that is, in our example one calculation using 2.5 parts and one calculation using 2 parts). If the difference between the two results exceeds €2,336 multiplied by the number of children's half-parts (one half-part in our example), then the tax is increased with the amount that exceeds the limit. In other words, the maximum tax advantage for each of the first two children is €2,336 and for each following child €4,672.
See below for income tax of interest.
If you employ personnel in your home (and declare it), you can get a tax credit of 50% of the salary and social charges paid, up to a €15,000 in 2009 or €20,000 in certain cases such as handicap. If the tax credit exceeds the tax otherwise due, the exceeding part is refunded.
Expenses for child minding (for children up to school age) away from your home entitles you to a tax credit of 50% of the expenses paid, less any contributions received from the CAF or others. If the tax credit exceeds the tax otherwise due, the exceeding part is refunded.
Child support expenses are in most cases deducted from income before tax is calculated.
Child benefit, housing benefit, RSA (Revenu de Solidarité Active) and other benefits paid by the CAF are mostly not taxable and they should not be declared on the tax return.
Unemployment benefit and sick pay are taxable and must be declared.
The tax return is pre-filled with information already known, except if you declare for the first time. It is your responsibility to verify that the information is correct and to correct it if not.
Income for a given tax year should be declared if it has effectively been paid within that calender/tax year in France or abroad. For bank transfers, the date that counts is what appears on the bank statement (note, for a foreign bank account, it is the date the amount was credited to the foreign bank account that counts, not the date you may have transferred the money to a French bank account). For cash and cheques, the date that counts is the date you were given the cheque or cash. For example, if your December 2009 salary was paid in January 2010, it is not taxable in 2009 but in 2010. Many employers pay the December salary in January but incorrectly include it in the 2009 income they have to declare to the tax office. To do things correctly, you should correct the salary declared yourself and declare it next year. However, it can sometimes be advantageous not to let the December salary float into next year, for example if you expect next year's income to be higher. In that case, even if not strictly correct, it would be fairly safe to declare the numbers the employer has given to the tax office for December, even if paid in January.
It is important to declare how many hours you have worked, as low-income families may qualify for a working families' tax credit known as prime de l'emploi. If the amount of prime de l'emploi exceeds the amount of income tax due, the exceeding part is refunded in September. The prime de l'emploi also applies to self-employment.
If the calculated income tax due is a small amount, a calculation method known as décote sets in to fade out the tax due. For the smallest tax amounts, the décote will do away with the tax due so there is nothing to pay.
This is a very generalised information. Refer to the French Inland Revenue for more information. You can calculate your tax at that site. At newsagents, you can buy an annual tax guide. In case of any doubt, do not hesitate to take professional advice, or ask your local tax office (centre d'impôt).
Note, this section only concerns French residents. Non-residents are nearly always paying tax of interest in their country of residence, according to the relevant double tax agreement and national tax law.
Also, this section does not concern the tax free savings account types Livret A, Livret bleu, Livret d'épargne populaire, Livret de développement durable, and Livret jeune. You can read more about that in the chapter about savings accounts.
Social charges are automatically deducted from the gross interest by French banks. The rate is presently 15.5%. If you are paid interest from outside France, you will be asked to pay the social charges once your tax return has been treated. The 15.5% is final.
Income tax is due on the gross interest. The tax rates applicable to general income (see above) apply. By default, French banks will deduct an advance of 24% from the gross interest. However, if your taxable income (revenu fiscal de référence) is €25,000 or less (single) or €50,000 or less (married or registered partnership), you may ask the bank not to deduct income tax. The deadline for this demand is 30 November.
It is important to remember that no matter if the bank deducts tax or not, it is only a provisional treatment. It is when you fill in your annual tax return that the final tax rate is determined.
If the bank has deducted tax in advance, the advance already paid will be made available to you as a tax credit deducted from the income tax due, or refunded if the credit exceeds the tax due. That neutralises the fiscal effect of the advance payment.
By default, the gross interest is taxed according to the tax rates on salary. However, if your annual interest is less than €2,000, you have the option on the tax return to choose a flat tax of 24% instead of ordinary income tax. This is only beneficial if your marginal tax rate is higher than 24%.
Capital gains tax on real estate
If you plan to invest in French real estate, you should be aware that real estate taxation has been frequently changed, i.e. increased, the last few years, and that the taxation is thus highly unstable. Tax on rental income and capital gains tax can be increased as the government pleases, and such changes apply to property you already own. My advice is to avoid buying real estate in France if the purpose is investment, property income, or just a secondary residence. The instability of tax, and the ongoing crisis, makes this a highly risky affair. The French real estate prices have not been subject to the bursting bubble seen in other countries, but the number of real estate transactions fell 25% in 2012. Particularly non-resident property owners were the subject of a tax hike in 2012 as part of socialist president François Hollande's hounding of 'the rich'.
Furthermore, the government decided to collect social charges on non-residents from 2012, something that I consider is a violation of EU law and a number of bilateral agreements about social security. Illegal or not, you will have to pay it if you are concerned, and only a court decision can overturn it.
If you still intend to invest in real estate in France, possibly with the exception of your primary residence, you will need specialist advice to understand the increasing complexity of real estate tax, and to be informed about the latest changes.
There is no tax or social charges on capital gains when selling the primary residence. If you have more than one property, it is not an option to decide which one you want to call primary. Which property is primary is determined by where you live most of the time, work, file your tax return, where your children go to school etc. The criteria for being the primary residence are evaluated on the date of the sale. You don't have to occupy or own the property for a minimal duration for the exoneration to apply, but you must be capable of proving, if necessary, that it really was your primary residence.
In practice, in many cases, you may already have moved out of the property when it is sold. In that case, it is no longer the primary residence. However, the tax office tolerates that up to one year passes before the property is sold, without your losing the tax exoneration. However, during that time, you cannot rent or lend out the property to anyone, even parents, or you risk losing the tax exoneration.
Accessory buildings sold at the same time as the main property are also exonerated. In case of a garage, it is exonerated if situation less than one kilometre from the main property and sold at the same time.
Consumption and Sales Taxes in France
The current VAT (sales tax - TVA in French) rate is 19.6%. 5.5% for some items and services, notably food, passenger transport and home improvements.
Businesses need to note that the VAT on petrol (gasoline) cannot be recovered, and that only 80% of the VAT on diesel (gazole, gasoil) can be recovered, except for special cases.
Excise duty on media storage devices
There is a copyright tax on writeable CDs and external computer harddisks and certain other storage devices useable for film and music to compensate artists for private copies (and at the same time, the media industry is making private copies more and more difficult to make, so it is beginning to look like a racket that you must pay a tax for something you can't do). It may or may not be cheaper to buy such devices outside France. According to the 2006 judgement from the European Court of Justice, excise duty on drinks bought by distance is payable in the country of delivery, and if the same principle is applied to storage devices, customs could thus collect the excise duty on arrival - if they find the devices in the post. In practice, the risk must be very limited. If you bring the devices across the border yourself, no taxes can be collected.
is automatically collected by the insurance company.
Tax on complementary medical insurance (mutuelle)
is automatically collected by the insurance company, so in principle, you don't need to know about it. However, as the State rakes in €1 billion per year on this recent tax, you can guess who has to pay this health tax indirectly. It is in fact a tax on the medical bills you have to pay. A way to avoid this tax is to not take out a complementary medical insurance, but it has to be weighed against the risk of being left with medical bills that exceed the cost of insurance. Another way to avoid this may be to take out medical complementary insurance from a foreign insurance company if possible and competitive. As a result of this tax, the cost of complementary medical insurance is predicted to increase by 4% in 2009.
are automatically included in the price at the pump for vehicles and heating.
Other Taxes in France
Taxe d'habitation, taxe foncière, contribution économique territoriale, and taxe locale sur les enseignes et publicités extérieures are known as local taxes.
Taxe d'habitation (dwelling tax)
is a tax on the dwellings you occupy on the 1 January in a given year. The tax does not depend on how long time you live in the property. If you move out on the 2 January, you must still pay the full tax for the year. The tax is payable in November the same year. The tax depends on the value of the property and your personal situation: More family members, less tax. The tax is also reduced if your income is below a certain level. A typical tax would be between € 300 and 1500 a year.
Redevance audiovisuelle (TV licence)
TV licence. €123 per year in 2011; €125 in 2012. It is mandatory for anyone having access to a TV set or similar device on the 1st of January in a given year. If you move to France on the 2nd of January or later with a TV set, then the tax is not due for that year. Even though it is not technically a local tax, it is automatically collected with the taxe d'habitation unless you tick a field on your income tax return to declare that you had no TV set on the 1st of January. Watching TV on a computer or listening to radio only is not taxed. One licence covers the entire household, no matter how many TV sets you have. For businesses using TV sets, you may have to pay per TV set.
Taxe foncière (property tax)
Individuals which are real estate owners pay taxe foncière, a real estate tax. It is roughly at the same level as the taxe d'habitation. It includes certain service charges, such as refuse collection. A property owner living in his own house and paying taxe foncière still pays taxe d'habitation, as these two taxes are distinct.
If you are budgeting for living in France, you need to take into account that the taxe foncière has been increased by 2.5 times the rate of inflation between 2006 and 2011 according to this Le Monde article, and that France's economic problems mean that the government is increasing taxes across the board rather than reducing public spending.
Contribution économique territoriale (CET), CFE, CVAE
French inheritance tax is called droit de succession. Inheritance may be taxed in several countries, depending on what is stipulated in double tax agreements or other bilateral conventions. Inheritance tax is not yet coordinated by the EU, although work is underway to make it fairer and simpler. Countries that could be involved in inheritance tax are the country/ies of nationality/ies of the deceased, the country of residence of the deceased, the country/ies in which the deceased was liable for income tax, the country/ies where his or her assets are, your country of residence, and your country/ies of nationality/ies. Inheritance tax for expats can become extremely complex in certain cases, and you may need professional advice.
Considering that only a marginal number of non-Danish expats are concerned by this, this paragraph is in Danish. If any non-Danish speakers need a translation, please do let me know.
Overenskomsten mellem Danmark og Frankrig til undgåelse af dobbeltbeskatning m.v. af 8. februar 1957, som bekendtgjort af Bekendtgørelse nr. 36 af 27. juni 1958, er opsagt af Danmark den 10. juni 2008 med virkning fra 1. januar 2009, så pensioner udbetalt fra Danmark derefter kan blive beskattet i Danmark. Opsigelsen får indvirkning på alle skatteforhold, hvor både Frankrig og Danmark berøres, herunder løn, virksomhed, pension, fast ejendom, lejeindtægt, ejendomsværdiskat, fortjeneste ved salg af fast ejendom, formueskat, kapitalindkomst og andet. Diverse websteder informerer om virkningerne, fx:
Notat fra SKAT
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