France is known to have one of the best social security systems in the world – but it’s paid for by a robust French tax system, which can be hard to navigate. French tax rates can be complex, especially if you don’t have a native understanding of French. We’re here to help you understand the French tax rates and make the most of your finances as an expat in France.
There are three kinds of personal taxes in the French tax system:
- French income tax (Impôt sur le Revenu)
- Tax on goods and services (Taxe sur la valeur ajoutée, or TVA)
- Social security contribution (Contributions Sociales).
The French tax system also includes French property tax and an occupier’s tax, plus capital gains tax if you’re selling property.
The French tax system is extensive, with a significant number of federal taxes. For expats, the various French tax rates and brackets can get very complicated – which is why Blacktower are here to help, with expert financial advice on the financial system in France, including the often-confusing French tax brackets. We can help you understand and navigate French tax rates and make sure you’re making the most of your personal finance. Get in touch with our French office today to find out how we can help.
Shown below is a summary of our understanding of the principle changes.
Inheritance Tax Rates per beneficiary
(Droits de succession) – there is no inheritance tax between spouses or couples with a PACS.
Between parents and children
|Less than €100,000||0%|
|The next €8,072||5%|
|€8,072 to €12,109||10%|
|€12,109 to €15,932||15%|
|€15,932 to €552,324||20%|
|€552,324 to €902,838||30%|
|€902,838 to €1,805,677||40%|
|Less than €15,932*||0%|
|The next €24,430||35%|
* Tax-free in certain circumstances; e.g. had lived with the deceased over the previous 5 years and is disabled.
Between other relatives (to 4th degree)
|Less than €7,967||0%|
Between unrelated persons (i.e. step-children)
|Less than €1,594||0%|
Social Charges (Contributions Sociales)
|Contribution sociale généralisée (CSG)||8.2% max.|
|Contribution au remboursement de la dette sociale (CRDS)||0.5%|
|Prelevement Social (PS)||5.4%|
The first two are taken on all forms of income and all four apply to unearned income and capital gains.
Income Tax Bands (Impôt sur le Revenu)
The French tax brackets use a scale based on income. These brackets can change with inflation, or in new budgets from the French government. The French tax brackets assess the income of your household, not per individual, by dividing families into a number of ‘parts familiales’.
|Up to €9,710||0%|
|€9,710 to €26,818||14%|
|€26,818 to €71,898||30%|
|€71,898 to €152,260||41%|
|€152,260 and above||45% *|
(Net taxable income per part after 10% allowance on earned and pension income).
For those over the age of 65, there is an extra tax-free allowance of €2,332 if total income does not exceed €14,630 and of €1,166, if total income is between €14,630 and €23,580.
*Additional tax for those with taxable income of over €250,000 per person in the household: 3% of taxable income rising to 4% for those over €500,000 per person.
Wealth Tax bands (Impôt sur la Fortune)
The French tax system imposes an annual ‘wealth tax’ in addition to the standard income taxes. Prior to 2018, this was charged on the total wealth of a household, but it’s now applied to real estate assets. Under the French tax rates, wealth tax is payable by any household with real estate assets of over €1.3m – though UK nationals don’t have to pay this tax for the first five years of their residence in France.
Taxation is on a banded system as follows:
|Up to €800,000||0%|
|€800,001 to €1,300,000||0.50%|
|€1,300,001 to €2,570,000||0.75%|
|€2,570,001 to €5,000,000||1.00%|
|€5,000,001 to €10,000,000||1.25%|