Expatriate tax ebook - France
Facts and figures
Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation
Pre arrival procedures
The employers of non EU nationals are usually required to apply for a work permit prior to the employee taking up employment in France. It is, therefore, important that the expatriate's employment contract and benefit package is structured tax efficiently before the contract is submitted to the Department of Trade and Employment in France.
Employment visas
Under the work permit procedure the employer will be required to advertise the position in France and the EU before the Department of Trade and Employment will consider issuing a work permit to a non EU national where a suitable candidate cannot be found.
A residence visa must also be obtained to allow the expatriate to live in France. Where the expatriate's spouse and family relocates to France, relevant visas and a separate work permits (where the spouse will also work) will be required. Where the expatriate is an EU national the above procedure is usually not required.
Tax year
The French tax year runs from 1st January to 31st December.
Tax returns and compliance
Individuals who are French resident for tax purposes must file their tax return before the end of May. Individuals who are not French resident for tax purposes must file before 30 June for EU residents and 15 July for non EU residents.
In the first year of liability, the taxpayer will pay the global amount of the tax due for the last tax year once a year in September. In the following years, tax is paid in three installments based on the tax paid the previous year with the remaining balance being paid in September. The taxpayer is also entitled to pay on a ten month period (from January to October).
Income tax rates
Taxable income of the tax household is divided in a number of equal parts (e.g. one part for a single person, two parts for a married couple, half a part for each of the first two dependant children, 1 part for the third child). Then the progressive tax scale is applied on the taxable income per part thus obtained. Lastly, the partial tax is multiplied by the number of parts determining the gross tax payable.
|
Portion of taxable income for one part (€) |
Rate (%) |
|---|---|
| < 5,687 From 5,687 to 11,344 From 11,344 to 25,195 From 25,195 to 67,546 > 67,546 |
0 5.5 14 30 40 |
Sample income tax calculation
|
Employment Income: |
€ |
|---|---|
|
Net salary |
60,000 |
|
Net car benefit (mileage driven during year) |
5,250 |
|
Net car fuel benefit |
2,850 |
|
Total earned income |
68,100 |
|
|
|
|
Allowance of 10% for expenses |
(6,810) |
|
Net taxable salary |
61,290 |
|
|
|
|
Dividend from French company |
3,000 |
|
Less 40% rebate |
(1,200) |
|
Less annual allowance |
(1,525) |
|
French bank interest |
500 |
|
Net taxable income |
62,065 |
|
Income tax thereon: 5,687 @ 5.5% |
311 |
|
13,851 @ 14% |
1,939 |
|
(remainder) 36,870 @ 30% |
11,061 |
Total |
13,311 |
|
Less: |
|
|
Allowance of 50% for a servant |
(3,500) |
|
Tax credit for dividends |
(115) |
|
Residual liability |
9,696 |
|
Social contributions |
386 |
|
Total |
10,082 |
Information about France:
Last updated 7 May 2008
This information has been provided by Amyot Juridique & Fiscal, a member firm of Grant Thornton International Ltd and is for informational purposes only. Neither Amyot Juridique & Fiscal nor Grant Thornton International Ltd can guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice.
Disclaimer
Contact us
For further information on expatriate tax services in France, please contact Anne Frede.