Verified Facts
Tax rates in Reunion range from 11% to 45% for personal income tax, with a corporate tax rate of 15% to 33%, and a standard VAT rate of 8.5% to 20%, making it essential for expats and businesses to understand the tax system to navigate their obligations.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Reunion, as a territory of France, follows the French tax system, which is based on the principle of worldwide taxation. This means that residents of Reunion are taxed on their global income, regardless of where it is earned. However, non-residents are only taxed on their income derived from Reunion sources. To be considered a tax resident in Reunion, an individual must have their permanent home in the territory, spend more than 183 days in a calendar year in Reunion, or have their center of economic interests in the territory.
The tax system in Reunion is complex, with various rules and regulations applicable to different types of income and taxpayers. Understanding the residency rules is crucial for individuals and businesses to determine their tax obligations. The French tax authority, Direction Générale des Finances Publiques (DGFiP), is responsible for administering taxes in Reunion, and taxpayers must comply with the tax laws and regulations to avoid penalties and fines.
Personal Income Tax
| Income Bracket (EUR) | Tax Rate |
|---|---|
| 0 - 9,700 | 11% |
| 9,701 - 27,086 | 14% |
| 27,087 - 74,237 | 30% |
| 74,238 - 160,336 | 41% |
| 160,337 and above | 45% |
| Taxpayers in Reunion are entitled to various deductions and allowances, such as a basic allowance of EUR 5,668, and deductions for mortgage interest, charitable donations, and education expenses. Tax returns must be filed annually, and taxpayers can choose to file online or by post. The tax authorities also provide a tax credit for certain types of income, such as foreign-sourced income, to avoid double taxation. |
Corporate & Business Tax
- The corporate tax rate in Reunion ranges from 15% to 33%, depending on the company's turnover and type of business.
- Small businesses with a turnover of less than EUR 82,800 may be eligible for a reduced corporate tax rate of 15%.
- Reunion has several free zones, including the Zone Franche de Reunion, which offers exemptions from corporate tax, VAT, and other taxes for eligible businesses.
- Companies must register with the Registry of Commerce and Companies (Registre du Commerce et des Sociétés) and obtain a tax identification number (SIREN) to operate in Reunion.
- Businesses must also comply with VAT registration requirements if their annual turnover exceeds EUR 82,800.
VAT / Sales Tax
- The standard VAT rate in Reunion is 20%, but a reduced rate of 8.5% applies to certain goods and services, such as food, housing, and transportation.
- A super-reduced rate of 2.1% applies to essential goods, such as pharmaceuticals, and a zero rate applies to exports and certain international services.
- Exemptions from VAT are available for certain types of businesses, such as financial services, healthcare, and education.
- Reunion has a tourist refund scheme, which allows non-EU visitors to claim a refund of VAT on purchases made in the territory.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered tax residents if they spend more than 183 days in a calendar year in Reunion.
- Reunion has double taxation treaties with 127 countries, including France, to avoid double taxation of income earned by expats and foreign workers.
- Expats and foreign workers must comply with social security regulations, which require contributions to the French social security system.
- Remittance rules apply to income earned by expats and foreign workers, who must declare their worldwide income and pay tax on it in Reunion.
- Expats and foreign workers may be eligible for a tax credit for foreign taxes paid on income earned outside Reunion.
- They must also comply with registration requirements, including registering with the local tax authority and obtaining a tax identification number.
Crypto & Investment Income
- Investment income, such as dividends, interest, and capital gains, is subject to income tax in Reunion.
- Cryptocurrency is considered a financial asset and is subject to capital gains tax, which ranges from 20% to 45%, depending on the type of asset and the taxpayer's tax bracket.
- Tax deductions are available for investment expenses, such as brokerage fees and management fees.
- Tax credits may be available for foreign taxes paid on investment income earned outside Reunion.