The déclaration des revenus (French tax return) is the first step to paying your income taxes in France. As an expat living in France, you will need to know the French tax regulations and learn how to file your French tax return online.
This guide provided by Elitax, a one-stop shop for assistance with French taxes, explains everything you need to file your French tax return, including which expenses can be deducted on your French tax form, such as childcare expenses, energy-efficient technologies, or hiring domestic help.
Elitax’s services span the full spectrum of tax advice, assistance, and support to meet the specific needs of the individual expatriate in France. Their primary focus is income and wealth tax returns, where they assist expats on positioning, preparation and processing of the returns during thorough personal consultations. Elitax also provides tax representation, tax training and tax audit support.
- Income tax in France
- Earnings subject to income tax France
- How to file your tax return in France
- Income tax rates in France
- Income tax in France for foreigners
- Tax refunds in France
- Tax fines in France
- Income tax advice in France
- Useful French tax terms
- French tax authority websites
Income tax in France
The income tax system in France
The French social security system is one of the most generous in the world and is paid for by hefty taxes.
The Ministry of Economy and Finance taxes any income made in France, as well as worldwide income of French residents, and, starting in 2019, this is organized through a Pay As You Earn (PAYE) system, whereby you pay your income monthly, as an extra deduction from your salary.
So, if you’re traditionally employed, your employer will receive your tax rate from the government and will withhold the corresponding monthly amount from your salary. Keep in mind that your contributions to social security are separate from your income tax payments.
Who pays income tax in France?
Under French law, you are a resident in France for tax purposes if you meet any one of the following four conditions:
- your permanent home (habitual home for you and/or your family) is in France;
- you spend most of your time in France (at least 183 days during a calendar year, or even less if you spend more time in France than in any other country);
- your professional activity is in France;
- the center of your economic or financial interest is in France.
Who is exempt from income tax in France?
The French government offers credits for tax residents who are elderly and/or disabled. Additionally, if you earn less than €10,064 annually, you shouldn’t have to pay income taxes. Beyond this, there are plenty of tax credits you can claim while filing your taxes.
Earnings subject to income tax France
Taxes on income and salary in France
Everyone who pays taxes in France is taxed on income made from French sources. This means that you are taxed on:
- employed and self-employed income
- bank interest
- pensions and annuities
- some business income
Taxes on savings and investments
Beginning in 2018, savings and income from investments is taxed at a flat rate of 30%, which includes the income tax rate of 12.8% and the social charges rate at 17.2%
Taxes on rental income
If you earn an income on rental properties, you’ll notify the tax authorities about the details in your tax returns and this income will also be taxed using the PAYE system.
How to file your tax return in France
Starting in 2019, if your house is equipped with internet access, you must file your taxes online. Though most people will pay their income taxes through the PAYE system, some exceptions do apply. These include investment income (including gains from life insurance policies), capital gains from financial investments, and real estate and non-French income.
Income tax deadlines in France
Tax deadlines vary slightly each year and are announced in late spring of the same year the taxes are due. For 2019, the paper deadline was May 16, 2019. In order to avoid online congestion, the deadlines to file a French tax return online vary between France’s départements (101 regions in total). Here’s what they were in 2019:
- 0 to 19 (and non-residents): 21 May, 2019
- 20 to 49: 28 May, 2019
- 50 and above: 4 June, 2019
Income tax forms in France
There is not a single French tax form, but rather additional forms for each type of income must be filled out to accompany your main French tax return form (Form 2042). If you have paid French taxes before, you will typically receive Form 2042 pre-filled, on which you should list your updated worldwide income and gains.
Other French tax forms include:
- 2042C: micro-entrepreneurs, complementary income and tax credits; it is also where you can offset tax paid in the UK or elsewhere.
- Rental income is either declared in Form 2013 (furnished properties) or Form 2044 (unfurnished properties).
- 2047: for declaring any income earned from abroad, which also must be stated on Form 2042.
- 2074: capitals gains (profit) from the sale of any assets or investments.
- 2035: BNC business earnings (régime réel);
- 2031: BIC business earnings (régime réel).
- 2047: for declaring any income earned from abroad, which also must be stated on Form 2042
- 3916: for any bank accounts held abroad.
Income tax rates in France
Income tax rates in France depend on whether you’re single or married, whether you have kids and, if so, how many, as well as your income and whether you’re self-employed. Generally, though, the income tax rates in France in 2020 are as follows:
- Up to €10,064: 0%
- €10,064–€25,659: 11%
- €25,659–€73,369: 30%
- €73,369–€157,806: 41%
- €157,806+: 45%
For example, a single person making €24,000 per year, would have the first €10,064 taxed at 0% and the remaining €13,936 charged at a rate of 11%.
Personal tax allowance and deductions in France
There are several credits you can claim when calculating your tax bill in France. These include:
- outside-the-home childcare for children under six (50% of cost, limited to €2,300 per child – maximum credit of €1,150 per child);
- having school-age dependents (€61 per child for collège, €153 for lycée, or €183 for university);
- installation of energy-saving technologies in the home (a chaudière à condensation or chaudière à basse temperature);
- employing a domestic worker (frais d’emploi d’un salarié à domicile) – you may deduct 50% of the salary, up to a maximum credit of €6,000;
- giving money to a charitable organization will provide for a deduction of either 75% (up to €537) or 66% of amount donated subject to further limitations depending on the charity;
- child support costs as a result of a divorce judgement;
- union fees.
Self-employed income tax allowances in France
If your business is considered within commercial sales, you’ll have a fixed cost allowance against 71% of sales through the tax matrix within the Micro Bénéfices Industriels et Commerciaux (Micro-BIC). For service-based businesses, you’ll also be taxed through Micro-BIC but your allowance will be 50%. Finally, running a business in a professional field (say, if you’re a lawyer), will have you taxed under a different matrix called the Micro Bénéfices Non Commerciaux (Micro-BNC) and your allowance will be 34%.
Income tax in France for foreigners
If you’re not a resident of France, but you’re earning income from French sources, say a French company, you must pay taxes on that income. However, France has tax treaties with a number of countries to avoid dual taxation, so be sure to do your research on the tax policies of your home country and France. For specific and accurate information about your financial situation, you should contract a financial tax advisor.
Tax refunds in France
Unlike in the US tax system, big tax refunds aren’t a normal, yearly expectation. However, if you have overpaid in taxes by the tenth month of PAYE, you’ll receive a tax refund after your tax notice goes out. If you believe there was an error with your taxes or your refund, you have two years to make a claim. Here is some more information about how to make a claim.
Tax fines in France
There is a fine of €15 if you fail to file online two years in a row (essentially allowing a one-year grace period to adapt). If, however, you’re late to file your taxes, you risk being penalized at 10% (majoration) for late filing.
Income tax advice in France
When living, working, and filing taxes in a country that’s not your own, it’s incredibly important to seek expert advice. This is even more true if you have a complicated tax status, for example if you’re self-employed or own property! So, don’t face tax season unprepared – get appropriate financial advice so that you can avoid problems or penalties.
Useful French tax terms
- Abattement: standard deduction.
- Avis de non-imposition: certificate of non-taxable income (you will receive this if your total income is under the taxable income threshold).
- Barème fiscal: tax-rate table (sets out the amount of tax for a given amount of income).
- Un contribuable: a taxpayer.
- Le credit d’impôts: a tax credit or a reduction in tax generated by one of many tax saving schemes.
- Un expert comptable: accountant.
- Conseillers fiscaux: tax advisors.
- Foyer fiscal: tax household (the household is calculated in portions, parts. First and second children counts as 0.5 parts; a third child counts as a full part. So a married couple with one child is a household of 2.5 parts; a married couple with three children has four parts. Even married children and grandchildren can be added to your tax household under specific conditions).
- Impôts sur le revenu: income taxes (as opposed to property taxes or sales taxes).
- Impôt de solidarité sur la fortune: wealth tax. In October 2017, France slashed its wealth tax levied on people with earnings of more than €1,300,000, and replaced it with a property levy ranging from 0.5% to 1.5% on the value of assets.
- Prélèvements obligatoires: all social charges; sometimes this can include income taxes taken at source
- TVA (taxe sur la valeur ajoutée): value-added tax or sales tax (it currently stands at 20% on all goods and services except those specifically exempted).
- Le revenu à déclarer: gross income.
- Revenu imposable: taxable income after all deductions and credits are calculated.
- Revenu foncier: rental income.