Entries by escec

How to Set Up a Personal Tax Account as a Non-Resident in France

/in /by

A tax number in France (numéro fiscal) is a unique 13-digit identifier assigned to individuals for tax-related purposes. This number is required to declare income, pay taxes, and access online tax services through the official French tax portal. If you are a non-resident, obtaining and setting up a personal tax account is essential to manage your tax obligations in France.

How to Access Online Tax Services in France

Each taxpayer, including non-residents, must use their tax number in France to log into their personal account. Members of the same tax household can access online services independently, using their individual tax numbers to declare income or check their tax situation.

Steps to Create Your Personal Tax Account as a Non-Resident

If you are a non-resident and have not yet set up a personal tax account, follow these steps:

1. If You Have a Tax Number in France and Are Liable for Income Tax

You can create your account using three key identifiers from your tax documents:

  • Tax Number (Numéro Fiscal): A 13-digit number found on the first page of your latest income tax return and other official tax documents.
  • Online Access Number: Located on the first page of your most recent tax return. This number changes annually, so always use the latest version.
  • Reference Taxable Income: Displayed on your most recent tax assessment notice, typically in the “Vos références” (Your References) section. If not found there, check the “Informations complémentaires” (Additional Information) section.

2. If You Do Not Have These Details

You may still apply for a personal tax account if:

  • Your income is subject to withholding at source, or
  • You have a tax number in France but are not required to pay income tax (e.g., you only pay residence tax on a second home or property taxes).

To proceed, complete an application on the impots.gouv.fr website and provide:

  • Your full name and marital status,
  • Your foreign postal address, and
  • A copy of an official identification document.

3. Account Activation and Login

Once your identity is confirmed, you will receive an email enabling you to finalize your account setup. To activate your account:

  1. Enter your tax number in France and date of birth on the login page.
  2. Set up a password and provide an email address.
  3. Click on the activation link sent to your email within eight hours to complete registration.

Important Considerations for Non-Residents

⚠ First-Time Tax Filers: If you are declaring income or assets in France for the first time, you cannot complete this process online. Instead, you must download the appropriate tax return form from impots.gouv.fr and mail it to the relevant tax office.

🔒 Password & Security: Your chosen password will be used for future logins. If you forget your tax number in France or password, you can retrieve them via SMS by updating your mobile number in your account settings.

Why Is a Tax Number in France Important?

A tax number in France is necessary for:

  • Filing tax returns and managing payments,
  • Accessing tax-related documents online,
  • Applying for tax benefits or exemptions,
  • Complying with French tax laws as a resident or non-resident.

By ensuring you have an active tax account, you can efficiently manage your fiscal obligations and avoid potential tax issues in France.

Taxation of Dividends Received by Shareholders

/in /by

Verified on February 17, 2025 – Directorate for Legal and Administrative Information (Prime Minister)

Dividends received by shareholders are subject to income tax (IR) or corporate tax (IS), depending on the tax regime of the shareholder. The rules differ based on whether the shareholder is an individual or a corporate entity. Additionally, the tax regime of the company distributing the dividends also plays a role. Dividends may be taxed either solely at the shareholder level or both at the company level and at the shareholder level.

What Are Dividends?

When a company subject to corporate tax (IS) generates profits, shareholders may decide, through a general meeting, to distribute a portion of these profits. These distributed profits are known as dividends.

In companies subject to income tax (IR), there are no dividends in the strict sense. This is because the company’s profits are not taxed at the company level but at the shareholder level, according to the shares they hold. The profits are included in the taxable income of the shareholder, meaning there is no separate dividend distribution.

How Are Dividends Taxed?

The taxation of dividends depends on the tax regime of the distributing company:

  • Income Tax (IR) Company: The company’s profits are taxed at the shareholder level. Each shareholder is taxed on the portion of profits corresponding to their shareholding. Dividends are included in the taxable profit.
  • Corporate Tax (IS) Company: Dividends are first taxed at the company level under corporate tax, and then taxed again at the shareholder level, based on their shareholding.

Companies Subject to Income Tax (IR)

When the company is subject to IR, its profits are taxed at the shareholder level. The dividends are included in the portion of profits corresponding to the number of shares held by the shareholder.

The taxation depends on the type of activity the company carries out:

  • Commercial or Craft Activity: Profits are taxed under industrial and commercial profits (BIC).
  • Professional Activity: Profits are taxed under non-commercial profits (BNC).

Companies Subject to Corporate Tax (IS)

  1. At the Company Level:
    The company’s profits (including dividends) are subject to corporate tax (IS), whether or not they are distributed. They are not deductible from the company’s profits.

The following corporate tax rates apply:

  • For companies with a turnover under €10 million and 75% of the capital held by individuals, a 15% tax rate applies on profits up to €42,500. Above that threshold, the rate increases to 25%.
  • For other companies, the corporate tax rate is 25%.
  1. At the Shareholder Level:
    Dividends are subject to income tax (IR) at the shareholder level.

Initially, a flat-rate withholding tax of 12.8% is applied to the gross dividend amount. This is withheld by the institution distributing the dividends to the shareholder.

This withholding tax is an advance payment on income tax, and the actual taxation occurs when the shareholder files their annual income tax return for the year in which the dividends were paid.

Shareholders can request an exemption from the withholding tax if they meet specific income conditions:

  • If single: Their fiscal reference income from two years prior to the dividend payment was below €50,000.
  • If married or PACSed: The fiscal reference income was below €75,000.

The request for exemption must be made by November 30 of the year before the dividend payment, and the shareholder must provide a sworn declaration confirming they meet the income conditions.

Taxation Options for Shareholders

Shareholders have two options for taxation of dividends:

  1. Flat-rate withholding tax (PFU): The PFU is 30%, which consists of 12.8% for income tax and 17.2% for social charges.
  2. Progressive income tax scale (IR): The shareholder may opt to be taxed according to the progressive tax scale instead of the flat-rate withholding tax.

How to Declare Dividends?

Shareholders receiving dividends must declare the amounts they received in their annual income tax return for the year in which the dividends were paid. The declaration method varies depending on the tax regime of the distributing company.

Income Tax 2025: Brackets and Rates

/in /by

Published on February 18, 2025 – Directorate for Legal and Administrative Information (Prime Minister’s Office)

The amount of income tax for the year 2024 is determined using a progressive tax scale. What are the income brackets for calculating your tax? What rates apply? Service-Public.fr provides the details.

How the Tax Scale Works

Income tax in France is calculated using a progressive system, meaning different portions of your income are taxed at different rates. The tax brackets range from 0% to 45%, depending on your taxable income.

Considerations for Tax Calculation:income tax 2025

Your taxable income is assessed based on the quotient familial (family quotient), which takes into account your marital status and the number of dependents you have. This system adjusts the tax burden to reflect household composition.

income tax 2025 Scale

Each year, the government sets the applicable tax brackets through the annual budget law. For 2025 (applying to 2024 income), the income thresholds have been increased by 1.8%.

How ESCEC Can Help You

At Escec International, we offer expert tax advisory services to help individuals and businesses navigate these tax updates. Our specialists can:
– Analyze your taxable income and applicable deductions
– Optimize your tax strategy to reduce liabilities legally
–Ensure compliance with the latest tax regulations
– Provide tailored financial advice to maximize savings

Don’t let tax season catch you off guard! Visit www.escec-international.com today and let our experts guide you through the 2025 tax changes.

Tax Brackets and Rates for income tax 2025

(Infographic representation of tax brackets and rates)

Would you like a summary table of the new tax brackets and rates?

Tax in France: 2025 Income Tax Brackets & Rates Explained

/in /by

Updated: January 1, 2025 – Directorate for Legal and Administrative Information (Prime Minister’s Office)

Understanding Tax in France: How the System Works

If you’re living or working in France, understanding the income tax system is crucial to managing your finances effectively. The French tax system follows a progressive taxation model, meaning the more you earn, the higher the tax rate you pay.

How Is it Calculated?

In France, income tax is based on a tiered bracket system, where earnings are divided into different tax bands. Each band is taxed at a specific rate, ranging from 0% to 45%. The family quotient (quotient familial) also plays a key role in determining tax liability, taking into account household composition (single, married, with or without dependents).

🔹 Key Fact: The income tax scale is updated annually as part of the French national budget. The 2025 tax bracketsapply to income earned in 2024.

Income Tax Brackets in France for 2025 (Based on 2024 Income)

Taxable Income (€)

Tax Rate

Up to €11,294

0%

€11,295 – €28,797

11%

€28,798 – €82,341

30%

€82,342 – €177,106

41%

Above €177,106

45%

– Marginal Tax Rate (TMI): The highest tax rate applicable to your income bracket.
– Average Tax Rate: The actual percentage of your total earnings that go towards taxes.

Example: How Much Tax Do You Pay in France?

If you are a single person earning €30,000 per year, your tax calculation will be as follows:

  • First €11,294 → 0% tax = €0
  • €11,295 – €28,797 → 11% tax = €1,931.22
  • €28,798 – €30,000 → 30% tax = €361

– Total tax owed: €2,292.22 (about 7.64% of income)

💡 Note: Your final tax bill may be reduced by deductions, tax credits, and exemptions available in France.

Who Needs to Pay it?

✔️ French residents: If France is your main place of residence, you must declare and pay tax on your worldwide income.
✔️ Non-residents: If you earn income from French sources (such as rental income, business income, or employment in France), you may still be subject to French taxation.

Additional Factors Affecting it

– Family Quotient (Quotient Familial): Adjusts tax rates based on household size, reducing tax burdens for families.
– Tax Deductions & Credits: Expenses such as childcare, home renovations, and eco-friendly investments can lower your tax bill.
– Social Charges (Prélèvements Sociaux): Additional contributions (e.g., CSG and CRDS) apply to certain income types.


    Ask your question:

    Taxes on the Allocation of Passenger Vehicles (Formerly TVS)

    /in /by

    Verified on March 21, 2025 – Directorate of Legal and Administrative Information (Prime Minister)

    Passenger vehicles are subject to two taxes on their allocation for economic purposes: the “annual CO2 emissions tax” and the “annual air pollutant emissions tax” (which have replaced the former TVS). Sole proprietorships are exempt from these taxes. Below, we provide the necessary information.

    A dedicated information sheet on the tax for the allocation of heavy goods transport vehicles (formerly the axle tax) is also available.

    Which Companies Are Subject to Taxation?

    General Information

    A tax is due whenever a vehicle is allocated for economic purposes within a taxable territory.

    A vehicle is considered allocated for economic purposes within the taxable territory when:

    • It is authorized to operate within the taxable territory
    • And it is linked to a company’s economic activity

    Note:
    The tax amount is proportional to the period during which both of these conditions are met.

    Taxable Territories

    The tax on vehicle allocation for economic purposes applies in the following territories:

    • Metropolitan France
    • Guadeloupe
    • Martinique
    • French Guiana
    • Réunion
    • Mayotte

    Condition 1 taxes: Authorization for the Vehicle to Operate Within the Taxable Territory

    All vehicles permitted to use public roads are considered authorized to operate within the taxable territory, regardless of whether:

    • They are registered in France or not
    • The authorization is temporary or permanent

    Thus, the following vehicles are not taxable:

    • Those belonging to a category or subcategory exempt from the requirement to hold a registration certificate (even if they are allowed on the road under specific conditions)
    • Vehicles without a valid registration certificate or those with a suspended registration certificate
    • Vehicles held by a used vehicle center and covered by a destruction certificate
    • Damaged vehicles that are banned from circulation (however, taxation resumes once authorization to operate is reinstated)

    Exceptions:
    Some vehicles are not taxable, even if they are formally authorized to operate, including:

    • Vehicles immobilized or impounded at the request of public authorities
    • Vehicles authorized to operate exclusively for the purposes of their construction, sale, repair, or technical inspection (only applies to vehicles with a provisional registration certificate “WW” or “W garage” or those designated as “demonstration vehicles”)

    Condition 2 taxes: Link to an Economic Activity in France

    General Information

    A vehicle is considered linked to a company’s economic activity if it meets any of the following three conditions:

    1. It is owned by a company and registered in France
    2. A company covers professional expenses related to the vehicle’s use in France
    3. The vehicle operates in France for the company’s economic activities

    Any company that owns a vehicle, pays for its professional expenses, or benefits from its operation is subject to tax obligations, including declarations and payments.

    Case 1: Vehicle Owned by a Company and Registered in France

    A vehicle registered in France and owned by a company is automatically linked to an economic activity.

    A company owns a vehicle if:

    • It is the legal owner, provided the vehicle is not leased out on a long-term rental basis
    • It leases the vehicle on a long-term basis (without subleasing it)

    Note:
    Anyone subject to Value Added Tax (VAT) is considered a company for tax purposes.

    Case 2: Vehicle Used for Work-Related Expenses in France

    A vehicle is considered part of a company’s economic activity if:

    • A company partially or fully covers costs related to its acquisition, leasing, operation, or maintenance (e.g., mileage reimbursements, lump-sum allowances)
    • The vehicle is used in France for work-related travel (by employees, executives, or similar personnel)

    Note:
    Commutes between home and work are not taxable under this rule.

    Case 3: Vehicle Operating in France for a Business Activity

    A vehicle circulating in France for the needs of a business activity is also linked to an economic activity.

    This applies to vehicles that:

    • Are not registered in France but are used by companies in France (even if the company itself is not based in France)
    • Are not owned by companies but are used for a company’s activities for a certain period (e.g., a vehicle lent for free by a non-VAT entity)

    Which Vehicles Are Subject to These Taxes?

    Affected Vehicles

    The two taxes apply to the following vehicles:

    • Category M1 vehicles (passenger cars) with “VP” (passenger vehicle) on their registration certificate, seating up to 8 people
    • Category N1 vehicles (light commercial vehicles under 3.5 tons that can transport both goods and passengers), including:
      • Vans with at least 3 rows of seats
      • Pick-up trucks with at least 5 seats

    Note:
    Pick-up trucks used exclusively at ski resorts or for ski lift operations are exempt.

    Exempt Vehicles

    The following vehicles are exempt from both the annual CO2 and pollutant taxes:

    • Vehicles used by sole proprietors
    • Vehicles belonging to nonprofit organizations
    • Vehicles used for:
      • Public transportation (taxis, chauffeur-driven cars, etc.)
      • Agricultural or forestry activities
      • Driving instruction
      • Competitive sports

    Mixed-use vehicles qualify for a proportional tax reduction based on the time they are used for tax-exempt purposes.

    Additional exemptions apply to vehicles that are:

    • Wheelchair-accessible or adapted for disabled drivers
    • Fully powered by hydrogen, electricity, or a combination of both
    • Used for rental services (exemption applies only to the rental company)
    • Temporarily provided to a customer while their vehicle is being repaired (exemption applies only to the owner providing the loaner vehicle)
    • Rented for very short periods (less than 30 consecutive days or one month per calendar year)

    How to Calculate the CO2 and Pollutant Tax Amounts

    General Rule

    The annual tax amount per vehicle is calculated as follows:

    • Annual proportion of the vehicle’s use for economic activity
    • Applicable annual tax rate based on the vehicle’s characteristics

    The final amount is rounded to the nearest euro.

    Proportion of Annual Use

    The proportion of annual use is determined by:

    \frac{\text{Number of days the vehicle is used for economic purposes}}{\text{Total days in the year (365 or 366)}

    Example:
    If a vehicle is used for business purposes for 219 days in a year, the proportion is:

    219365=60%365219​=60%

    In most cases, the proportion is 100%, except in cases of:

    • Acquisition or sale of the vehicle during the year
    • Temporary bans or impoundment

    Tax Rates

    The tax amount is based on the vehicle’s:

    • CO2 emissions
    • Fiscal horsepower (if CO2 emissions data is unavailable)

    Tax Brackets for 2025 (WLTP Standard)

    CO₂ Emissions (g/km)

    Tax Rate (€)

    Up to 9 g/km

    0

    10 – 50 g/km

    1

    51 – 58 g/km

    2

    59 – 90 g/km

    3

    91 – 110 g/km

    4

    111 – 130 g/km

    10

    131 – 150 g/km

    50

    151 – 170 g/km

    …

    Note:
    From January 1, 2025, vehicles running on Superethanol E85 benefit from a 40% CO2 emissions reduction for tax purposes.

    Additionally, vehicles powered exclusively by hydrogen or electricity are fully exempt from the CO2 tax.

    Severance Pay Calculator: Easily Estimate Your Compensation

    /in /by

    If you’re facing job termination, knowing how much severance pay you’re entitled to is crucial. A severance pay calculator can help you quickly estimate your compensation based on key factors such as seniority, salary, and employment contract.

    This guide walks you through how these calculators work and what you need to prepare to get the most accurate results.

    What Is a Severance Pay Calculator?

    A severance pay calculator is an online tool designed to help employees and employers estimate redundancy compensation. It considers both:

    • Statutory severance pay (the minimum required by labor laws)
    • Contractual severance pay (if covered by a collective agreement or specific company policies)

    The tool automatically selects the most favorable compensation for the employee based on the provided details.

    How to Use it

    To get an accurate estimate, follow these five simple steps:

    Step 1: Enter Employment Details

    Provide basic information about your job, including:
    ✔ Your employment start and end dates
    ✔ The date of dismissal notification

    Step 2: Identify Your Severance Pay Policy

    Some companies follow a collective agreement or internal policies that offer higher compensation than standard labor laws. If applicable, enter your agreement details.

    Step 3: Calculate Seniority

    Your length of service is a key factor in determining severance pay. The calculator will ask for:
    ✔ Your total years and months of service
    ✔ Any long-term absences that might affect the calculation

    Step 4: Provide Salary Information

    To determine your compensation, enter:
    ✔ Your gross salary over the last 12 months
    ✔ Whether you worked full-time or part-time

    Step 5: Get Your Severance Pay Estimate

    Once all details are entered, the calculator will generate your estimated severance package, including:
    – The minimum severance pay required by law
    – Any additional compensation based on company policies or agreements
    – A detailed breakdown of the calculation formula

    Why Use it online ?

    – Fast and Accurate – Instantly get an estimate without manual calculations
    – Easy to Use – Step-by-step guidance ensures accurate input
    – Legal Compliance – Calculates both statutory and contractual severance pay
    – Printable Report – Save and print your results for reference

    Important Notes About Severance Pay

    • If covered by a collective agreement, you may be entitled to a higher payout than the legal minimum.
    • You can find details about severance policies in your employment contract or pay slip.
    • If no collective agreement applies, the calculator will default to statutory severance pay regulations.

    Get Started with a Severance Pay Calculator

    By using a severance pay calculator, you can quickly understand your entitlements and prepare for the next steps. Whether you’re an employee seeking compensation or an employer calculating redundancy costs, this tool provides clarity and accuracy.

    Looking for more insights? Explore additional resources such as:
    – Notice period calculators
    – Net-to-gross salary converters
    – Templates for severance letters

    Stay informed and ensure you receive the severance pay you deserve!

    Secure Digital Portal for Public Officials (Ensap): Pension Account Access

    /in /by

    State Pension Service (SRE) – Ministry of Public Finance (ENSAP)

    The Ensap (Secure Digital Space for Public Officials) provides a personalized online platform dedicated to retirement services for public officials, magistrates, and military personnel.

    If you are or have been a permanent state official for at least two years, or if you receive a personal or survivor’s pension, you can securely communicate with the State Pension Service (SRE) through your personal account. This includes submitting inquiries and relevant documents via a secure messaging system. Additionally, SRE advisors may request further details regarding your pension status.

    Important Information

    For those with careers spanning multiple pension schemes, it is advisable to create an account on info-retraite.fr—a centralized platform developed by the State Pension Service in collaboration with other mandatory pension schemes. This site provides comprehensive information and services across all pension plans applicable throughout your career.

    Why Use Ensap?

    Ensap simplifies pension management by offering:
    – Secure and easy access to retirement benefits.
    – Personalized pension details for public officials.
    – A direct communication channel with SRE advisors.
    – A safe platform to submit important pension documents.

    Managing Multi-Scheme Pensions

    If you have contributed to multiple pension plans during your career, you should also create an account on info-retraite.fr. This official inter-scheme platform, developed by the State Pension Service and other pension organizations, provides centralized access to all your retirement plans.

    Stay Updated on Your Pension in 2025

    With ongoing updates in pension policies, it’s crucial to stay informed. Log into Ensap today and take full control of your retirement benefits in 2025 and beyond!

    Tax Declaration 2025: Key Dates and Changes to Know

    /in /by

    The tax declaration 2025 period is approaching, and the French tax authorities have announced that online declarations will open on April 10, 2025. While the exact deadlines for submission depend on the taxpayer‘s place of residence, they have not yet been officially confirmed.

    Key Dates and Deadlines

    • April 10, 2025 – Online tax declarations open on the official tax website.
    • September 28, 2025 – Automatic tax deductions will take place.

    Taxpayers must ensure they meet the deadlines to avoid penalties.

    Online Tax Simulator Available

    To estimate income tax for 2024 earnings, a tax simulator has been available since March 7, 2025. However, the final tax amount may change based on actual income and deductions applied during the declaration process.

    Changes for 2025

    Several tax modifications have been introduced following the Finance Law for 2025, including:

    • Updated Tax Brackets: The income tax scale is adjusted upward by 1.8%, based on inflation (excluding tobacco).
    • Expanded Tax Benefits: More charities, including those supporting domestic violence victims, are now eligible for tax-deductible donations.
    • Tip Exemptions Extended: The exemption for service tips from social contributions and income tax, introduced in 2022, has been extended.
    • Agricultural and Energy Renovation Incentives: Certain tax deductions and exemptions in these sectors have been revised.

    These updates aim to provide financial relief while ensuring tax fairness. More details will be available once the tax declaration process officially begins.

    How to Determine Your Taxation Status in France?

    /in /by

    Updated on January 1, 2025 – Legal and Administrative Information Directorate (Prime Minister’s Office)

    Determining your taxation status, also known as taxation determination, is essential to comply with French tax laws. Whether you are a French citizen or a foreign resident, the French tax authorities define your tax residency based on specific criteria.

    Criteria for Taxation Determination in France

    Your tax residence is in France if you meet any of the following conditions:

    1. Your Household is in France

    Your taxation determination depends on your habitual residence. If your family (spouse, civil partner, or dependent children) primarily lives in France, you are considered a French tax resident.

    2. Your Main Professional Activity is in France

    If your principal job, self-employment, or business operations are based in France, you are subject to French taxation. This includes situations where your employer is French or if your economic interests are centered in France.

    3. Your Center of Economic Interests is in France

    Your tax residency is also determined by where you generate most of your income, manage investments, or conduct business activities.

    Impact of International Tax Treaties

    France has tax treaties with various countries that may alter standard taxation determination rules. If you have dual residency status, check the applicable tax treaty to avoid double taxation.

    If your spouse or civil partner is considered a tax resident of another country under an international agreement, you must declare:

    • Your personal income and that of dependents residing in France
    • French-source income earned by your non-resident spouse, provided the tax treaty attributes taxation rights to France

    Special Cases: International Officials: Taxation Determination

    Specific rules apply to international civil servants regarding taxation determination. If you work for an international organization, consult your tax office to clarify your status.

    How to Verify Your Tax Residency?

    To ensure accurate taxation determination, contact your local French tax office. Understanding your tax status helps you comply with legal obligations and avoid unnecessary penalties.

    Paris Taxes: Essential Information for Residents and Expats

    /in /by

    The primary tax authority overseeing Paris taxes and national taxation is the Ministère de l’Action et des Comptes Publics. French tax regulations apply from January 1 to December 31 each year. The due date for annual income tax returns (Form 2042) is typically between May and June, with exact deadlines determined by the tax administration.

    Joint Filing and Extensions

    Married couples are required to file a joint tax return, including the income of any dependent children. Tax return extensions are not typically available, but deadlines are established and clearly stated on the tax forms issued to taxpayers.

    Social Charges and Non-Resident Taxation

    Social Contributions (CSG/CRDS)

    A key component of Paris taxes is the Contribution Sociale Généralisée (CSG) and Contribution au Remboursement de la Dette Sociale (CRDS). These apply to all residents at a standard rate of 9.7% on 98.25% of gross salary (if below €175,968 per year). Income exceeding this threshold is taxed at 100% of the gross salary.

    For non-residents, the minimum tax liability is 20% on net taxable income up to €27,478 and 30% for amounts exceeding this threshold. However, if a non-resident can prove that their global effective tax rate is lower, the standard progressive tax rates may apply.

    Who is Liable for Paris Taxes?

    Taxation in France is based on residency status:

    • Residents: Individuals with their home, main place of work, or center of economic interests in France are taxed on worldwide income.
    • Non-residents: Taxed only on French-source income.

    France offers favorable tax treatment for expatriates, particularly those seconded to work in the country. The Impatriate Tax Regime allows eligible employees to exclude up to 30% of their net remuneration from income tax.

    Taxable Income Categories

    The Paris tax system categorizes income into different types:

    • Salary Income: Includes wages, bonuses, and employer-paid benefits such as housing and education costs.
    • Self-Employment and Business Income: Divided into commercial, professional, and agricultural earnings, all subject to progressive tax rates.
    • Investment Income: Interest and dividends are taxed at a flat 30% rate (12.8% income tax + 17.2% social charges). Some foreign-sourced income may be eligible for a 50% tax exemption for up to five years.
    • Real Estate and Rental Income: Subject to standard income tax plus 17.2% in social charges.
    • Stock Options and Capital Gains: Gains from stock options or the sale of securities are generally taxed at 30%, with some exemptions available.

    Real Estate Wealth Tax in Paris

    Individuals owning real estate in France may be subject to Real Estate Wealth Tax (IFI):

    Taxable Real Estate Value (EUR)

    Tax Rate (%)

    0 – 800,000

    0%

    800,001 – 1,300,000

    0.5%

    1,300,001 – 2,570,000

    0.7%

    2,570,001 – 5,000,000

    1%

    5,000,001 – 10,000,000

    1.25%

    10,000,001+

    1.5%

    Exemptions and Caps

    French tax residents are taxed on worldwide real estate assets, while non-residents are only taxed on French properties. A five-year exemption applies to individuals moving to France who have not been tax residents for the past five years.

    Exit Tax and Inheritance Taxes

    Exit Tax

    An exit tax applies to individuals leaving France if they own over 50% of a company or hold more than €800,000 in shares before breaking tax residency. Taxation is based on unrealized capital gains, with potential deferrals depending on the destination country.

    Inheritance and Gift Tax

    Paris taxes include inheritance and gift taxes based on residency:

    • If the deceased or donor was a French resident, tax is due on global assets.
    • If the deceased or donor was a non-resident, tax applies only to French-based assets.

    France has signed estate tax treaties with 36 countries to prevent double taxation.

    Social Security Contributions

    Employers and employees in France contribute to social security, independent of CSG and CRDS contributions. The total employer charge is 35%-47%, while employees contribute 15%-24% of their gross salary.

    Tax Filing and Payment Procedures in Paris

    Withholding Tax System

    French residents pay income tax through a withholding system, deducted monthly from salaries, pensions, and unemployment benefits. Self-employed individuals and rental property owners make quarterly or monthly tax prepayments.

    Annual Tax Return

    Both residents and non-residents must file an annual income tax return, generally due in May or June. The tax authority then issues a final tax bill in August or September, detailing any additional tax due or refunds owed.

    Penalties apply for late payments:

    • 10% penalty for late filing or payment.
    • 2.4% annual interest (0.2% per month) on outstanding balances.

    Double Taxation Relief

    France has double tax treaties with 125 countries, helping taxpayers avoid double taxation through:

    • Tax credits equal to French tax liability on foreign income.
    • Exemption with progression, meaning exempt income is factored into tax calculations.

    Final Thoughts

    Understanding Paris taxes is essential for residents, expats, and non-residents with financial ties to France. Staying informed on income tax rates, social contributions, and wealth taxes can help optimize tax obligations and ensure compliance with French law.