Individual Taxation on Personal Income

Individuals who have their tax domicile in France, whether French nationals or foreign residents, are generally subject to personal income tax (PIT) on their worldwide income, unless excluded under an international tax treaty.

Those who are not domiciled in France (non-residents) are only taxed on income derived from sources in France, or in some cases, on imputed income.

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Personal Income Tax (PIT) Rates in France

All categories of income are aggregated, and after the application of allowances, the taxable base is subjected to progressive rates. The French system also uses income splitting rules to account for family status. In practice, the more dependents a taxpayer has, the lower their taxable burden.

• Shares allocation system:

  • One share for a single person.

  • Two shares for a married couple without children.

  • Half a share for each of the first two dependent children.

  • One full share for the third child and every additional child.

Example: The income of a married taxpayer with three children is divided into four parts for tax purposes.

However, the tax savings from income splitting are capped, with limits varying depending on marital status and dependent children.

Progressive rates range from 0% to 45%, with an additional surtax of 3% on income above EUR 250,000 for single taxpayers and EUR 500,000 for couples filing jointly. A 4% surtax applies to income exceeding EUR 500,000 for singles and EUR 1 million for joint filers.

From 2025 onward, the Contribution Différentielle sur les Hauts Revenus (CDHR) applies to French residents whose adjusted taxable income exceeds EUR 250,000 (single) or EUR 500,000 (joint filers).

Progressive Tax Rate Examples for 2024

The following table illustrates PIT impact based on net taxable income:

Note: Social contribution rates are based on 2023 averages. PIT rates apply to 2024 income.

Social Surcharges on Income

In addition to the tax of France on personal income, several social contributions apply to different types of earnings:

Individuals affiliated with a compulsory social security scheme in another EEA country or Switzerland are exempt from CSG and CRDS on investment income. However, such income remains subject to a solidarity levy of 7.5%.

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

The inbound assignee regime applies to employees assigned to France by a foreign employer or recruited abroad by a French company (effective since 2008). Eligible individuals must not have been French tax residents during the five calendar years before their assignment.

Benefits under this regime include:

• Exemption on salary supplements related to the transfer.

• Option to choose either:

  • Exemption on actual supplements received, or

  • Flat exemption of 30% of total remuneration.

Foreign workday compensation may also be exempt, but the overall exemption is capped at 50% of total pay. Alternatively, employees may choose an exemption limited to 20% of taxable remuneration.

The regime is available for eight years (five years if the assignment began before July 2016).

Headquarters Tax Regime

Certain expatriates who cannot qualify under the inbound assignee regime may benefit from the headquarters regime, which offers tax exemptions on expatriate allowances.

Conditions include:

• Residency in France for no more than six years.

• Not being considered a French tax resident in the year prior to transfer.

For example, employer reimbursement of tuition fees for dependent children in primary or secondary school may be exempt from the tax of France.

Local Income Taxes in France: Tax of france

France does not impose local taxes on personal income. However, local housing taxes apply to individuals who own or rent property in France as of January 1 of the tax year.