Verified Facts
France has a complex tax system with a range of tax rates and rules that apply to individuals and businesses, including a progressive income tax system with rates ranging from 11% to 45%, a corporate tax rate of 32%, and a value-added tax (VAT) rate of 20%.
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
France has a worldwide taxation system, which means that residents are taxed on their global income, regardless of where it is earned. However, non-residents are only taxed on their French-sourced income. To be considered a resident for tax purposes, an individual must have their domicile or residence in France, or spend more than 183 days in the country in a calendar year. The tax system is administered by the Direction Générale des Finances Publiques (DGFP), which is responsible for collecting taxes, enforcing tax laws, and providing taxpayer services.
The French tax system is based on a self-assessment principle, which means that taxpayers are required to file their own tax returns and pay their taxes directly to the government. The tax year in France runs from January 1 to December 31, and tax returns must be filed by May 31 of the following year. Taxpayers can file their returns online or by mail, and they can also seek assistance from a tax professional or the DGFP.
Personal Income Tax
| Income Bracket (EUR) | Tax Rate |
|---|---|
| 0 - 10,256 | 11% |
| 10,257 - 27,361 | 30% |
| 27,362 - 74,517 | 41% |
| 74,518 - 160,336 | 45% |
| above 160,336 | 45% |
| Personal income tax in France is progressive, with higher income brackets subject to higher tax rates. Taxpayers are also entitled to various deductions and allowances, such as a standard deduction of 10% of gross income, as well as deductions for mortgage interest, charitable donations, and childcare expenses. Tax returns must be filed annually, and taxpayers can claim refunds if they have overpaid their taxes. The tax filing deadline is May 31 of each year, and taxpayers can file their returns online or by mail. |
Corporate & Business Tax
- The corporate tax rate in France is 32%, although small businesses with turnover of less than EUR 7.63 million may be eligible for a reduced rate of 28%.
- Small businesses may also be eligible for research and development (R&D) tax credits, which can provide a refund of up to 30% of R&D expenses.
- France has several free zones and enterprise zones, which offer reduced tax rates and other incentives for businesses that locate in these areas.
- Businesses must register with the Registre du Commerce et des Sociétés (RCS), which is the French commercial register, and obtain a SIREN number, which is a unique identifier for businesses in France.
- Companies must also file annual financial statements and tax returns with the DGFP.
VAT / Sales Tax
- The standard VAT rate in France is 20%, although reduced rates of 10% and 5.5% apply to certain goods and services, such as food, transportation, and healthcare.
- Exemptions from VAT include financial services, education, and healthcare, as well as exports of goods and services.
- Tourists may be eligible for a VAT refund on purchases of goods that are taken out of the country, provided they meet certain conditions, such as spending at least EUR 175 in a single transaction.
- Businesses must register for a VAT number and file regular VAT returns with the DGFP.
For Expats & Foreign Workers
- Expats are considered tax residents in France if they spend more than 183 days in the country in a calendar year, or if they have a permanent home in France.
- France has a network of double taxation treaties with over 127 countries, which can help to reduce or eliminate double taxation of income.
- Expats may be eligible for a foreign earned income exclusion, which can exempt a portion of their income from French tax.
- Social security contributions are mandatory for all employees in France, including expats, and are typically deducted from salary.
- Expats may also be required to register with the French social security system, which provides access to healthcare and other benefits.
- Remittances of income to foreign countries may be subject to withholding tax, although this can be reduced or eliminated under certain double taxation treaties.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to tax in France, although the tax rate may vary depending on the type of income and the taxpayer's residence status.
- Cryptocurrency is considered a financial asset for tax purposes, and gains from the sale of cryptocurrency are subject to capital gains tax.
- Taxpayers may be required to report cryptocurrency transactions on their tax returns, and may be subject to penalties for failure to report or pay tax on these transactions.
- France has introduced new tax rules for cryptocurrency, including a flat tax rate of 30% on gains from the sale of cryptocurrency, and a reporting requirement for taxpayers who hold cryptocurrency.