If you are unsure whether or not you need to pay tax in France then there are a few regulations you need to be familiar with. If you intend to stay in France on a permanent basis then you are liable for French taxes as soon as you arrive in the country. You may also be considered a resident if your main home is in France or if the country is where you spend most of your time. This will also apply if your main work is in France or if the country is where you have all your assets.

A person does not have any choice in this matter. If any of these conditions applies to them then they are liable for French taxes. It may be that a person is also liable for taxes in another country. In this situation a person will be assessed according to the regulations laid out in the double taxation treaty between the two countries.

A person will have to pay tax (impot) on all income earned worldwide. This includes salaries earned, rental income, pension and any investments that they may have. There are five income tax rates and there are various allowances which a person can earn before they need to begin paying tax. If you earn less than €5963 you do not pay any income tax. If you earn between €5964 and €11,896 you pay tax at 5.5%. If you earn between €11,897 and €26,420 you pay tax at 14%. If you earn between €26,421 and €70,830 you pay tax at 30%. Anything over this amount is taxed at 41%.

Tax is calculated on the total income of the household but when there is a high household income the family can be divided into ‘parts familiales’ in order to avoid some of the higher rates of income tax. Couples are divided into two ‘parts’ with extras added for children.

There is no PAYE system in France. When you are paid your salary you are paid the whole amount and you need to ensure that you have savings to pay your tax bill. If you are self employed you will fall into one of two categories for taxation. The BNC is the professional category for lawyers, doctors, accountants and qualified people in similar occupations. The BIC category is for those who are engaged in commercial enterprises. These have different thresholds for tax and different conditions apply to each one.

If you earn interest on savings you will find that it is subject to an 18% tax which is withheld at source. If you receive interest on a bank account in another country you can opt to have tax taken at this rate or pay standard income tax on it with the rest of your earnings. These rules can also apply to dividends paid to you.

If you have a pension then you pay tax on it at the standard tax rates. Other forms of income such as maintenance payments, child support and other types of pension all qualify to be taxed at the standard tax rates. Rental income from property is also taxed at the standard rates.

There are a number of deductions which can be made from the gross income before tax needs to be paid. Expenses which are work related are tax deductible, social security contributions can be taken into consideration as can interest paid on certain business loans. There are other deductible items too such as pension contributions. Extra allowances are given for the elderly and children below a certain age who return home to live with the family.

Married couples complete a joint tax return and tax is paid in the year after the income is earned. Payments can be made in three instalments or ten instalments. Tax returns must be filed by 31st May after the end of the tax year but you can request an extension to this deadline if you are having difficulties or if you intend to make a payment online. Forms can be sent to your home or downloaded from the website of the tax department. The website can be translated using Google translate but there is no English section on it and all dealings with the tax department will be in French.

Useful Resources

Impots.gouv.fr (French government's tax website)
www.impots.gouv.fr

UK Centre for Non-Residents
Telephone: 0845 070 0040 or +44 151 210 2222