Blog | French income tax

French income tax

If you intend to settle in France or just own a property on French territory, it is crucial to be familiar with the main rules of income taxation in France.

 

  1. As a resident for tax in France 

 

You are considered as resident for tax in France if you are on French soil for more than 183 days a year or if the most of your personal and professional interests are located there.

As French tax system is cumbersome, you are highly advised to seek for assistance in case your personal situation may lead to confusion.

Being fiscally domiciled in France you are required to declare your entire income including that of foreign origin. In this instance international fiscal conventions need to avoid double taxation (it is worth mentioning that France is one of the countries that have signed the most fiscal conventions in the world).

 

Warning: in the absence of a fiscal convention French law prevails unconditionally, leading to the taxation in France of all the income embodying that which has already been subject to another country fiscal charge.

Are considered as revenues from French origin, any income generated by an activity undertaken on French soil:

  • Treatments, salaries, comprised vacation work, paid vacations and gratuities
  • Health insurance daily allowances (paid for sick absences or maternity leaves for instance)
  • Benefits in kind offered by the employer such as food, housing, sometimes computers…)
  • Unemployment benefits
  • Early retirement allowances
  • Parliamentary allowances and local or regional representatives’ indemnities

Furthermore:

  • Income from independent professions (merchants, art crafts and licensed professionals) are considered from French origin when pursued in France.
  • Income owned
  • Pensions and retirement funds are of French origin when delivered by an organism or a person residing in France.
  • Investment income (interests, dividends earned …) are considered from French origin when distributed by an organism or a person residing in France.
  • Income from property assets (rental income, gains from increase in value when reselling a property), shall be assimilated to French origin income when the property is located in France.

 

Progressive tax schedule applied to 2020 revenues:

 

Progressive tax schedule applied to 2020 revenues

Income brackets

Tax rate applied to the corresponding bracket
 (Marginal tax rates)

Up to €10084

0%

from €10085 to €25710

11%

from €25710 to €73516

30%

from €73516 to €158122

41%

€158123 and more

45%

 

 

  1. You are not resident for French tax

 

Not being a resident for tax in France does not mean that you have nothing to declare in France: indeed, you have to declare as mentioned above all income of French origin.

Therefore, you have to declare the following income:

  • Wage from a private work undertaken in France
  • Revenues from independent activities
  • Rental income, gains from increase in value when reselling a property located in France
  • Rents from disposal of shares or financial assets from companies with over 50% of property assets and located in France
  • Dividends distributed by a French company

Warning: Non-resident taxpayers are not submitted to the progressive income taxation but are charged at a minimum rate of 20%

In any case it is noteworthy that doing an income tax declaration in France is mandatory, if you earn income in France, independently of whether you are a French resident or not.

No doing so so can expose you a lumpsum taxation, penalties or surcharges and default interests.

You can of course count on us as partner when it comes to facing taxation challenges in France!!!

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