Once you establish residency in France, you are liable to pay taxes in France on your income worldwide. Here’s a guide to filing a French tax return as an expat.
The déclaration des revenus (French tax return) is the first step to paying your 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.
Are you liable to pay French taxes?
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.
How are taxes in France calculated?
French taxes are calculated on a calendar year basis. In order to comply with your French income tax reporting obligation, you must complete Form 2042 (the recapitulative form) and perhaps other forms depending on the source and type of income and expenses for the year.
PAYE and the French tax return
In 2019, the French government introduced a PAYE system, whereby tax for employees will be taken at source, rather than all employees needing to fill in a tax return.
From January, the tax office will deduct an amount on the 15th of each month as a withholding tax on 2019 income, with the amount you’ll pay based on your income tax notice from 2018.
In May 2019, everyone will need to fill out a tax return on their 2018 income as usual, but after this, it’s likely that many employees won’t need to fill out returns in future.
Deadlines for filing your French tax return
Generally, income tax declarations must be completed by some time in May of the following year, though the actual date can vary from one year to another. If you are not a first time filer you also have the option to file online, which gives you additional time. The French tax month (May) is known as La Declaration des Revenus.
It is very important to respect the filing deadlines. There will be a penalty assessed at 10% (majoration) for late filing.
Those who have previously filed a French tax declaration and are already in the system should expect to receive a pre-printed (pré-remplie) tax form, with certain information filled in the form. This information will include salary amounts, bank interest, dividends etc.
If the information provided in the pre-printed form is incorrect, you should cross out the erroneous figures and write in the correct figures. You will not receive a preprinted form if you opt to file your French tax return online.
For those who will require a form and have not received a pre-printed form, you can obtain forms at your local tax office (centre des impôts) or online by referring to the French tax authority.
French tax returns online
The French tax authorities are working to making filing French tax returns easier. For the time being, most people can choose between filing a paper declaration or an online French tax return, however, conditions exist.
If you have previously earned above a certain threshold and have an internet connection, you will typically be required to file a French tax return online and could be fined if you don’t. 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).
The deadlines to file a French tax return online vary between France’s départements (101 regions in total) to avoid online congestion:
- Départements 0 to 19: 23 May (midnight)
- Départements 20 to 49: 30 May
- Départements 50 and above: 6 June
- Non-residents: 23 May
French tax return: Declaring your income and deductions
As a French tax resident, you are taxed on your worldwide income. This will include salary, pensions, interest and dividends, rental and any other income.
Tax credits 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.
If you are married, then you are likely to have to file a joint return for the entire year, with exceptions only allowed in limited circumstances. Your family return should also include your dependents (any children aged under 21, or students aged under 25).
In the year of divorce, each spouse needs to file a separate tax return as you are considered divorced for the entire year.
The overall rule is that you must fill out a déclaration for yourself from the date of death until 31 December; you have six months from the date of death to correctly fill out a joint déclaration from 1 January until the date of death.
Filing US taxes from France
Despite the fact that every US citizen and Green Card holder is required to file a tax return with the IRS even when living abroad, many expatriates still fail to do so. Many are unaware of these obligations, thinking that as an expat they do not need to pay or file tax returns in the US. You do! For more information and help filing your US tax returns from France, contact Taxes for Expats and see our guide to taxes for American expats.
French tax forms in English
It is not possible to fill in French tax forms in English. If you can’t read and write in French, you can employ a translator or tax advisor to assist you. Some local French tax offices deliver sessions in English to help non-French speakers through the process of filing a French tax return.
French tax forms
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 in the mail, on which you should list your worldwide income and gains.
Other French tax forms include:
- Form 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).
- Form 2074: capitals gains (profit) from the sale of any assets or investments.
- Form 2035: BNC business earnings (régime réel);
- Form 2031: BIC business earnings (régime réel).
- Form 2047: for declaring any income earned from abroad, which also must be stated on Form 2042.
- Form 3916: for any bank accounts held abroad.
Paying your French taxes
You do not pay any amount with your declaration. Once your declaration is received by the French tax authorities, they will calculate your tax and send you a bill (avis d’imposition), usually around mid- to late-August. If you are a first-time filer, you may get your tax bill as late as November or December of the year you filed.
Once you are in the system, the French tax authorities will use the previous year’s income as a basis to calculate the following year’s taxes.
The standard payment cycle is three installments but you can also put in place a monthly tax withholding arrangement either through an express request at your local tax office or by going online. For more information, read Expatica’s guide to taxation in France.
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.
- Un credit d’impôts: a tax credit or a reduction in tax generated by one of many tax saving schemes.
- Un expert comptable: accountant.
- Conselliers 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 and 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).
- Revenu à déclarer: gross income.
- Revenu imposable: taxable income after all deductions and credits are calculated.
- Revenu foncier: rental income.