The French tax year for personal income tax follows the calendar year and runs from 1 January to 31 December. Companies may choose whichever date that they find convenient as their year-end.
No. If you become resident in France on 31 May, you are deemed to be fiscally resident from 31 May to 31 December, not before. You are only required to declare your worldwide income for the period for which you are French resident (i.e. 31 May to 31 December). The full lower rate tax bands will be applied to your income and will not be reduced by time apportionment.
Yes. If you are working for a French employer, they will declare your salary to the French tax authorities and deduct income tax at source under the French PAYE system. In the absence of a prior year’s return on which to calculate a personalised tax rate, a standard rate or emergency rate is applied.
This tax rate is calculated using the standard tax bands, based on your monthly salary only (not taking into account any additional sources of income) and assumes that you are single with no dependent children.
Once you have submitted your first French income tax return and received a tax assessment, any differences between tax deducted at source (from your salary) and tax owed will result in a tax refund or balancing payment.
The process can be summarised as follows:
- An initial meeting with you, preferably in person or alternatively at the telephone;
- You give us all relevant documentation e.g. payslips, bank interest, rental summaries, etc; We need to receive everything at least one month before the deadline.
- We then prepare your French tax return using the relevant forms including any necessary appendices;
- We post to you the tax return for your review and signature, and returning to us.
- On receipt of the signed and finalised tax return, we will submit it electronically to the tax office for you.
- Your French tax assessment known as an avis d'imposition will be sent to you the following Autumn. You should then forward this to us for checking before any tax is paid. We can also advise re making payment of the tax.
Deadlines change each year but typical due dates are as follows:
|All paper returns (regardless of residence status)||17th May|
|French residents submitting online returns (varies by postcode region, but at the latest)||7th June|
|Non-residents submitting online returns||7th June|
Please note that all individuals must submit their first return as a paper return. In your first year therefore you do not have the option to file online.
The French income tax return form (form n°2042) can be downloaded from the government website here.
The completed form should then be posted to the local tax office which deals with your address in France.
You may locate your local tax office here.
If you are already in the French tax system (and assuming you have not recently moved house), the contact information for your local tax office is shown on the front page in the top-right hand corner of your pre-printed tax return.
French residents may create an account on www.impots.gouv.fr following receipt of their first tax assessment, using the online access number (numéro d’accès en ligne) displayed in the top right-hand corner. They may thereafter submit their declarations via this online portal. The tax authorities are phasing in obligatory electronic submission for French residents.
James Howes & Co can also submit tax returns electronically via our accounting software.
If you are already in the French tax system, you will receive a pre-printed tax return each year (unless you opt to go paperless). The information already known about you by the tax office will be already filled in (such as your name, contact details and certain sources of income already declared to the authority by e.g. your bank or employer).
You may choose to submit the pre-printed return (with any necessary additions or amendments) for ease. Alternatively you are free to disregard the pre-printed return and print off a fresh paper copy or indeed return online.
Income tax deduction at source (“PAS” or prélèvement à la source) was introduced in France on 1 January 2019. Since then tax has been deducted by employers from French salaries or for other kinds of income taken from your personal French bank account by direct debit.
It continues to be compulsory to submit a personal tax return each year in order to determine the rate at which you will be taxed.
The tax return submitted in May-June each year re your prior year income will be used to assess the rate applied in the following year. You will be able to know this rate upon receipt of your tax assessment in Autumn each year.
Late payment will generally incur a fine of 10% of the amount due. This is called a majoration.
Yes. The process would be the same as if the tax return were not late. But expect to be charged the 10% majoration usually incurred on late submission.
The tax assessment is called an avis d'impôt.
For online submissions, the assessment is sent to you online via the online portal at www.impots.gouv.fr.
For paper submissions, the assessment is made available online and also posted to you.
In 2017 the dates were as follows:
|No tax due/entitled to a reimbursement (electronic assessments).||24 July||31 July|
|Tax due (electronic assessments).||3 August||5 September|
|Paper assessments.||-||Early September|
*For first-time tax returns, or those living outside France, these dates may be later due to the additional administration time required.
The due date for payment will correlate with the date that your tax assessment is sent to you. It will not be less than six weeks after the assessment is raised.
Also known as contributions sociales in the case of rental income, these are a payment to the French social security system, but unfortunately do not entitle the payer to any social security benefits or payments. For all practical purposes, they are an additional component of income tax and are payable by French and overseas residents alike.
Social charges are levied at flat rates, in other words they do not increase proportionately to your income.
There are several components of that make up the prélèvements sociaux. The table below summarises the 2018 rates which vary according to the type of income declared:
|Contribution sociale généralisée (CSG)||9.2%||8.3%||9.9%|
|Contribution au remboursement de la dette sociale (CRDS)||0.5%||0.5%||0.5%|
|Prélèvement de solidarité||0.0%||0.0%||2.0%|
Yes it may be possible, but there are very strict restrictions.
The rules are set out in Article 4B of the French tax code (Code Général des impôts) and Article 3 of the UK / France Double Tax Treaty of 19 June 2008. The criteria are not as black and white as the UK rules now are and the French authorities are likely to regard a French salaried individual as French resident for tax purposes, unless he/she can prove otherwise.
From the outset, your intention must be to not become French resident. All of the criteria below must be met, and are shown in order of importance.
- Your household base (foyer) must remain outside France. By foyer is meant not only your personal main residence but also the place of residence of your spouse and dependent children. It is therefore easier to show non-residency when one's foyer abroad consists of spouse and dependent children, rather than you as a sole individual.
- The majority of your earned income must be derived from employment outside France i.e. in this way French earned income could be for the provision of additional services that support your main profession, such as a British doctor who owns a practice in Manchester, but lectures monthly at a Paris university.
- Your centre of economic interests must remain outside France. The definition of this quite wide and refers to one's substantial assets e.g. principal investments, assets, owned practices/ businesses.
- You must only be in France for an absolute maximum of 183 days per calendar year. Any more than four months of habitual residence will bring you prima facie within the definition of a resident of France.
It should be noted that if you are not French Resident you are not entitled to French health care.
You must declare all sources of income and capital gains earned both in France and abroad.
This includes all sources e.g. salaries, rental income, capital gains from investment holdings, bank interest etc.
Separate rules apply if you are self-employed or run a company which you own.
The table below shows some categories of income which are exempt from French tax and therefore should not be included in the return.
|Interest from qualifying French savings accounts||Livrets A, livrets Bleu, livrets d'épargne populaire, plans d'épargne-logement, livrets Jeunes|
|Social benefits||Family support, single parent allowance, disabled benefits, housing allowance|
|Compensation, damages from personal injury||-|
|Some pension receipts||Retired armed services|
|Young people/students||Those receiving minimum wage or who undertake certain educational and vocational schemes|
No. However there is no disadvantage to doing so. It will usually become inconvenient not to possess a French bank account.
You will be liable to wealth tax on property if:
- You are French resident and your global real estate is worth more than € 1,300,000 (see note below).
- You are non-French resident but you own French real estate worth more than € 1,300,000.
Until the 2018 Financial Act was passed, most wealth was taxable. In 2018 for the first time only property and related assets (e.g. shares in a property-holding company) and liabilities (loans taken out for property purchase or repairs) come into the scope. Notably excluded are stocks and securities, cash, furniture, cars, yachts and jewellery.
If you are French resident and own your principal private residence, an abatement of 30% of the market value is available when calculating your net wealth.
For new residents in France, only French situs property is taxable for the first five years of residence. Assets outside of France are exempt during that period.
The date of valuation and assessment of one's assets and liabilities is 1 January each year.
Going forwards, net wealth will be declared on the income tax return (with an annexe providing additional details if the wealth exceeds € 2,570,000. Accordingly, the same deadlines will apply.