Dual Citizen French-US Tax: What You Need to Know

Navigating Tax Obligations as a Dual Citizen
Being a dual citizen of France and the United States comes with unique tax responsibilities. Understanding how the tax systems of both countries interact is crucial to managing your financial obligations. This guide explains everything dual citizens need to know about French and U.S. taxes, including income tax, social contributions, wealth tax, and local taxes.

1. Dual Citizen French-US Tax: Income Tax Obligations

Worldwide Income Declaration

As a dual citizen, you are required to declare all worldwide income in both countries:

  • In France, all income from French and foreign sources must be reported.
  • In the U.S., you must file an annual tax return with the IRS, regardless of where you reside.

Avoiding Double Taxation

The bilateral tax treaty between France and the United States prevents double taxation. The treaty determines where income is taxable based on its nature and origin.

  • France taxes income earned locally, while some categories of foreign income remain taxable in the U.S.
  • Any U.S. income that must be reported in France is offset by a foreign tax credit, eliminating double taxation.

Key Tip: Even if income is taxed only in the U.S., you must still report it on your French tax return for compliance purposes.

2. French Tax Rates for Dual Citizens

France uses a progressive tax scale based on your total household income:

  • Up to €10,064: 0%
  • €10,065 to €25,659: 11%
  • €25,660 to €73,369: 30%
  • €73,370 to €157,806: 41%
  • Above €157,807: 45%

Fiscal Shares (Parts Fiscales)

The French tax system accounts for household composition through “fiscal shares”:

  • A single person = 1 share.
  • A married or civil union couple = 2 shares.
  • Children contribute additional shares (e.g., 0.5 per child for the first two).

Calculation Example:
For a family of four (2 adults and 2 children):

  1. Divide taxable income by 3 shares.
  2. Apply the progressive tax scale.
  3. Multiply the result by 3 to calculate the total tax owed.

3. Social Contributions for Dual Citizens

Some income types, such as rental income, dividends, and capital gains, are subject to a 17.2% social contribution taxin France.

Deductibility Update:
Since 2019, the U.S. recognizes French social contributions as deductible taxes for IRS purposes, offering relief for dual citizens managing taxes in both countries.

4. Wealth Tax for Dual Citizens (Impôt sur la Fortune Immobilière)

Who Pays Wealth Tax?

Dual citizens must pay French wealth tax if their total net real estate assets exceed €1.3 million.

Taxable Assets:

All real estate assets held directly or indirectly, including properties in:

  • France
  • The U.S.
  • Other foreign countries

Temporary Exemption:
New residents in France are exempt from wealth tax on foreign properties for the first five years of residence.

5. Local Taxes for Dual Citizens in France

Property Tax (Taxe Foncière)

  • Paid annually by property owners.
  • Based on the property’s cadastral rental value and local tax rates.

Residence Tax (Taxe d’Habitation)

  • Applies to secondary residences.
  • Calculated using the property’s rental value and the regional tax rate.

6. Filing Requirements for Dual Citizens

  • French Income Tax: Must be declared by May for income earned in the previous year. Tax notices are issued in late August or early September.
  • U.S. Tax Returns: File annually by April 15, with extensions available for expats.
  • Wealth Tax: File at the same time as the French income tax declaration in May.

Key Considerations for Dual Citizen French-US Tax Management

  1. Double Filing Obligations: As a dual citizen, you must file tax returns in both France and the United States.
  2. Stay Compliant: Ensure you meet all deadlines and reporting requirements to avoid penalties in either country.
  3. Seek Professional Advice: Consult a tax specialist familiar with both systems to maximize tax credits and deductions while staying compliant.

By understanding your tax obligations as a dual citizen of France and the U.S., you can navigate the complexities of international taxation with confidence. Proper planning will help you optimize your tax strategy and maintain compliance in both countries.

Ready to Simplify Your Dual Citizen French-US Tax Obligations?

For personalized assistance with navigating your dual citizen French-US tax obligations, visit www.escec-international.com. Our team of tax specialists provides tailored advice to ensure compliance with both French and U.S. regulations, helping you maximize your tax benefits and minimize liabilities. Whether you need support with income tax, wealth tax, or local levies, we are here to guide you every step of the way. Contact us today to simplify your tax journey and focus on what matters most—your new life in France!