Paying your taxes in France
So, you’ve relocated and decided to live the French dream. But, in the country where you can benefit from great wine, skiing and beautiful beaches, how do you go about your taxes?
Who must pay taxes
As a resident of France, you must pay tax. You are classed as a ‘fiscal resident’ as soon as you arrive in France and have the intention of staying for at least 183 days. However, if you work abroad (out of France) you may still have to pay French taxes. If your spouse and children still live here you may need to pay taxes in France. We strongly recommend speaking to a Financial Adviser to see where you come into the French stipulations.
You are breaking the law if you are not registered to pay tax but are considered a resident. Don’t panic! You can easily register online or at your local tax office.
When must I pay my taxes
Taxes in France are paid 3 times a year, as follows:
- ⅓ paid mid-February.
- ⅓ paid mid-May.
- The remainder is paid mid-September.
September is also a reconciliation period for taxes paid earlier in the year.
What do I have to pay tax on
Taxes are paid on your previous year’s revenue. The following sources of income are taxable in France:
- Wages, earnings, salaries
- Unemployment benefits
- Business or rental income
- Non-commercial or agricultural profits
- Capital gains, investment income, savings interest
- Pensions and annuities
- Income from stocks, shares and dividends
How can I reduce my tax bill
Fortunately, France offers many opportunities for you to pay less tax. The concessions include:
- La Prime d’Activité – eligibility depends on your earnings.
- If you have certain efficient energy features in your home
- If you invest money in an assurance vie investment policy
- Contributing to certain pension plans
- Giving to charity
- Other tax credits are available for employing domestic help, child-carers (for children under 6), school fees for collège and lycée;
- If you declare rental income
- Property purchase schemes that have attractive tax breaks (for example buying under the Loi Pinel).
What if I’m already paying tax in my home country
France has many double taxation agreements with various countries. This means that residents avoid paying tax both in their home country and France.
What are the French tax rates
Below are the tax rates for 2017. Meaning this is what you will pay on 2016’s income.
€9,711 – €26,818 14%
€26,819 – €71,898 30%
€71,899 – €152,260 41%
Above €151,261 45%
Those earning between €250,000 – €500,000 will be subject to paying an extra 3%. Those earning above €500,000 a year will be subject to paying an extra 4%.
There are many corrections and exemptions when it comes to paying your taxes in France.
Speak to a qualified and experienced financial adviser to ensure you make the right choices with your money.