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Tax in France

Updated on May 22, 2014
Princessa profile image

Wendy moved to France in 2005. She planned to stay there for only 5 years but fell in love with everything French and still living in France

Tax in France

I once read that one can avoid everything but death and taxes. Not a cheery thought if like me you get overwhelmed with numbers and financial advice. Taxes are always a tricky subject, but when you have to deal with taxes in a different country and even worse in a different language, taxes can be more than daunting.


I will start telling you that I am not a tax advisor and the following lines are just based on my readings and experience as a foreigner living in France. Here, the tax laws are complex and tend to change from year to year, so it is often necessary to consult a tax advisor. Fortunately enough, you can get free advice at your local tax office and at your local town hall.


Source

French taxes – Les Impots


French taxes are higher than American taxes and are among the highest worldwide. However, this is compensated by the fact that the French government offers more services in the areas of retirement benefits, child care and health care.

If you are a French resident (you spend more than 183 days a year living in France) Tax is also collected on income earned worldwide

To understand the French tax system you need to know that there are two main bodies involved in the French taxation process:

  • The tax inspectors – Centre d’Impots, who determine your tax liability
  • The Tax collectors – Tresorerie.

These can be confusing sometimes as these two administrations work separately. Thankfully, in my town they are in the same building so I can be “ping-ponged” from one to the other without too much frustration, every time I have a tax issue.

In France there are four main taxes that you will be concerned with:

  1. Income tax known as Impôt sur le revenue, which constitutes the primary tax burden in France
  2. The "Taxe d'Habitation"
  3. The "Taxe Foncière"
  4. Tax the redevance audiovisual

Who has to pay tax in France?


The short answer is EVERYONE. Everyone over 18 years old, who is resident in France (French or foreigner) or is working in France, has to submit an income tax return form. People who are not earning enough to pay income tax are also obliged and advised to submit and income tax form as this will allow them to benefit from certain advantages such as a reduced tax d’habitation, taxe fonciere and several social aids.

On becoming French resident it is your responsibility to make yourself known to the tax authorities and to declare fully your income, capital gains and wealth. For your first year of charge, your French income tax demand will be sent out and payable in late August/early September. But if you are living in France and you have not received yet an income tax return form I would recommend that you visit your nearest tax office and request one.

The French tax authorities can be rather friendly once you get to know them and they are a good free source of advice.

French Income Tax Rates for 2014

Source

Calculating your tax in France

Your tax in France

French individual income tax is calculated on aggregate household income, meaning that it includes the incomes of husband, wife and dependent children.

The actual calculation is beyond my capabilities, taxes are determined by adding net figures from each category of income and subtracting all deductions and then dividing the result in units which are separately taxed. 

Income tax in France

You can declare your income tax online and benefit from extended dates for declaration and payment, online advice, automatic tax calculators and different ways of payment according to your budget. 

 

Income tax in France is paid in arrears, meaning that every year you need to put aside some of your income for paying the taxman the following year.  You can choose to pay annually, every three month or on a monthly basis.  However, those whose tax bill is no higher than €337 are required to make one single payment by the due date.

For an average income you can count on about one month’s salary in income taxes. 

Taxe de redevance audiovisuel

This is a media/audiovisual royalty’s tax paid by every household with a television set.  The redevance audiovisual goes to fund public programming. Each household pays the same amount regardless of how many televisions are owned at the property.

Living in France Practical information

Living and Working in France: A Survival Handbook (Living & Working in France)
Living and Working in France: A Survival Handbook (Living & Working in France)

Living and Working in France is designed to provide newcomers with the practical information necessary for a relatively trouble-free life. Its contents include finding a job, permits & visas, health, accommodation, finance, insurance, education, shopping, post office and telephone services, public transport, motoring, TV and radio, leisure, sports and much, much more. It is packed with vital information and insider tips to help minimize culture shock and reduce the newcomer's rookie period to a minimum.

 

Property tax: taxe fonciere

If you are on a low income it is worth informing yourself at your local tax office as you can get relief from the local property taxes.

What if you don’t have the money to pay your tax bill? How do you get out of your increasing tax debts?


In France, very soon you can end up in serious debt if you delay your tax payments as you are punished with a10% penalty, as well as an interest charge of 0.40% per month (4.80% per year) on the outstanding sum. 

 

To avoid falling into endless debt, if you find yourself in financial difficulty and cannot pay your tax bill, you are strongly advised to contact your tax office and negotiate a delay in payment or payment in small instalments.  Do not hesitate to write to your tax office and propose to them according to your budget a realistic time to pay your whole bill.  If you have written proof that your income has declined by at least 30% over the proceeding three months, it is your right to be allowed a longer period of time to pay your tax bills.

If by any chance you are already late paying your taxes and you are punished with the “10% majoration” you can write to your tax office to explain the cause of your delay in payment asking for relief from the penalty. 

Michael Moore On French & American Taxes

Some useful Vocabulary:


Personal income tax : Impôt sur le revenu.

Tax inspectors: Centre d’Impots

Tax collectors:  Tresorerie

Property tax: tax fonciere.  An annual tax based on the value of land and housing.

Sales tax:  TVA (tax sur la valeur ajoutée)

Professional tax : Taxe professionnelle, a tax paid for the right to conduct business.  

Certified Public accountant: Expert comptable

Bookkeeper: Comptable

Turnover: Chiffre de affairs

Audit: controle des comptes

This article is for general information purposes only and does not constitute legal, financial or other professional advice. We advise you to seek professional advice before acting on this information.

Comments

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    • Princessa profile imageAUTHOR

      Wendy Iturrizaga 

      5 years ago from France

      Time to fill in your tax forms again if you live in France.

    • Princessa profile imageAUTHOR

      Wendy Iturrizaga 

      7 years ago from France

      htodd: you are welcome. I hope it was useful.

    • htodd profile image

      htodd 

      7 years ago from United States

      Thanks for the great post!

    • Princessa profile imageAUTHOR

      Wendy Iturrizaga 

      7 years ago from France

      SweetiePie: I must say that despite its flows, the French Health system in one of the best ones. We pay high social charges but it is worth it as you can confirm it in your state.

      pertibha321: I didn't know that taxes were high in India. Thanks for the insight.

    • pertibha321 profile image

      pertibha321 

      7 years ago from india

      In India also we need to pay too much as taxes but still we don't get that type services like France so i think its not bad.But quite good to know.thanks for sharing with us

    • SweetiePie profile image

      SweetiePie 

      7 years ago from Southern California, USA

      Very informative hub. Here in California I pay more state than I paid federal taxes, but that is okay. Our state actually believes in having more social services to help our people, and other states like Wisconsin do not care about teachers and workers. I actually like that the French all banded together to protest when the retirement age was raised recently. At least people care about having adequate health care for all.

    • Princessa profile imageAUTHOR

      Wendy Iturrizaga 

      7 years ago from France

      E. Grant: You should fill in the appropiate forms to be granted a tax exemption or else you should request to pay your taxes in affordable montly fees.

    • manjubose5 profile image

      manjubose5 

      7 years ago

      Political and financial issues are seemed to be very complicated to me. However, my husband deals with all these. Surely he will be interested to this well informative hub.

    • profile image

      E. Grant 

      7 years ago

      What happens if you canno pay your taxes?

    • Princessa profile imageAUTHOR

      Wendy Iturrizaga 

      7 years ago from France

      dahoglund: Thanks for the comment. I imagine that as a writer it can be interesting to see how things work in other countries. France is a beautiful place but it is complicated when you are living here and have to deal with things such as taxes.

      Simone: I wrote this hub in an effort to try to understand better how the tax system works in here. As I said, it is complicated. I have only dealt with the most "urgent" or "common" taxes, the ones most people have to deal with.

      Les Trois Chenes: I tried closing my mind to it the first few years too, lol. But now that my situation has changed I really need to deal with this issue myself. It can be overwhelming but as I mentioned, the tax officers are very helpful giving you free advice. Most of the time you won't really need to employ a "comptable" just make an appointment at your local tax office if you have any doubts about what taxes you should be paying and what benefits you should be getting.

    • Les Trois Chenes profile image

      Les Trois Chenes 

      7 years ago from Videix, Limousin, South West France

      How good of you to tackle this question. I just try to close my mind to it all, except, of course, to do as you say and make sure I have enough to pay the taxes here. I'm particularly delighted to hear that when I retire the taxes will be less onerous. Many thanks for a nice, clear explanation.

    • Simone Smith profile image

      Simone Haruko Smith 

      7 years ago from San Francisco

      Very cool! I really appreciate your translation and explanation of come of the key terms, too! You've organized what I imagine to be quite the complicated system in an easy-to-follow and logical way - so cool! Thanks for writing the Hub :D

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