Individual Tax – Taxes on Personal Income in France

Overview of Individual Tax Obligations in France

Any individual—whether French or a foreign national—who is considered a tax resident in France is generally subject to individual tax on their worldwide income, unless a double tax treaty stipulates otherwise. Non-residents, on the other hand, are only taxed on income sourced in France or, in specific cases, on imputed income.

More information on individual tax reporting obligations when your marital status changes.

Income Tax Rates and Family Quotient

Income from various sources is aggregated and taxed after deductions at progressive rates. France applies the quotient familial (family quotient) system, which adjusts tax burdens based on household composition. This system works as follows:

• Single taxpayer: 1 share

• Married couple without children: 2 shares

• First and second dependent child: +0.5 share each

• Third and subsequent children: +1 share each

For example, a married couple with three children receives 4 shares, which helps reduce their individual tax liability.

Note that the tax benefit resulting from income splitting is subject to caps, which vary by family status and net taxable income.

Progressive Individual Tax Rates in France

France employs a progressive individual tax scale ranging from 0% to 45%. An additional surtax applies as follows:

• 3% on income over €250,000 (single) or €500,000 (married)

• 4% on income over €500,000 (single) or €1 million (married)

Sample PIT Calculations (2021 Rates, 2022 Contributions)

Note: Average social contributions are based on 2022 rates, and PIT calculations reflect 2021 brackets.

Social Surcharges on Individual Income

In addition to standard individual tax, France imposes various social surcharges on income types such as salaries, rental income, dividends, and capital gains:

Individuals covered by a compulsory social security scheme in another EEA country or Switzerland are exempt from CSG and CRDS on investment income but remain liable for a 7.5% solidarity levy.

Inbound Assignee Regime (Article 155 B of the French Tax Code)

Foreign employees transferred to France or recruited abroad may qualify for special individual tax relief under Article 155 B, provided they have not been French tax residents for five years prior and meet specific domicile requirements.

Key features of this regime include:

• Exemption on actual salary supplements or

• 30% flat-rate exemption on total salary

Foreign workday-related remuneration may also be exempt, subject to:

• A 50% overall exemption cap (salary supplements + foreign workdays), or

• A 20% exemption if actual amounts are declared separately

The scheme requires that compensation meets a minimum benchmark based on similar roles in France. It remains available for eight years (five for those arriving before 6 July 2016), even if the employee changes position within the same group.

This regime is not combinable with the tax benefits for French nationals working abroad. Due to its complexity, professional tax guidance is advised.

Alternative ‘Headquarters’ Regime for Expatriates

Employees who don’t qualify under Article 155 B may still benefit from the “headquarters” expatriate regime, provided they:

• Were non-residents in the year before assignment

• Remain in France for no more than six years

Under this regime, certain expatriation benefits—such as tuition reimbursements for dependent children—may be excluded from taxable income.

Local Taxation Rules for Individuals

(H3)

France does not levy local individual tax on income. However, those who own or occupy residential property on 1 January of the tax year may be liable for local housing taxes. More details can be found in the Property Taxes section.