French Tax 2026
french tax 2026
Table of Contents
- Determination of residence
- Consequences of being tax resident in France
- Personal income tax rates in France (Tax Year 2025 – declared in 2026)
- Income tax deductions and allowances
- Filing deadlines for French income tax returns
- French company tax rates (2026 – taxation of 2025 profits)
- VAT (TVA – Taxe sur la Valeur Ajoutée)
- Capital Gains Tax on French property (2026)
- Local property taxes in France
- Wealth Tax in France (IFI – 2026)
- Taxation of capital income (interest, dividends, investment gains)
- Need assistance
Determination of Residence:
french tax 2026
An individual is considered a French tax resident if at least one of the following conditions is met:
- Presence in France for 183 days or more during a year
- Main professional activity carried out in France
- Primary place of residence located in France
- Center of economic interests based in France (e.g. main investments, business operations, or primary income sources)
If a person qualifies as a resident in more than one country, the applicable Double Tax Treaty determines their tax residency status.
Consequences of Being Tax Resident in France
French tax residents are subject to:
- Income tax on worldwide income and capital gains (with relief mechanisms in case of double taxation)
- Wealth tax on global net assets
- Inheritance and gift tax on transferred assets, with possible relief where international rules apply
Personal Income Tax Rates in France (Tax Year 2025 – Declared in 2026)
| Taxable Income (€) | Tax Rate |
|---|---|
| Up to 11,600 | 0% |
| 11,600 – 29,579 | 11% |
| 29,579 – 84,577 | 30% |
| 84,577 – 181,917 | 41% |
| 181,917+ | 45% |
Income tax is calculated using the household quotient system:
- Total household income is divided into “parts” (family shares)
- The tax scale is applied to income per part
- The result is then multiplied by the number of parts
Each dependent child counts as half a part. The tax benefit per child is capped at €1,807.
Income Tax Deductions and Allowances
Allowances on Employment Income
- Standard deduction: 10% of salary (maximum €14,426)
- Pension contributions: up to 10% of salary (based on a capped income of €37,094), or €4,637 if higher
Filing Deadlines for French Income Tax Returns
The French tax year follows the calendar year.
Deadlines for filing income tax returns (for residents and non-residents) are published annually in official tax guidance.
Since 2019, France applies a withholding tax system (prélèvement à la source). Monthly payments are based on the most recent tax assessment notice (avis d’impôt).
French Company Tax Rates (2026 – Taxation of 2025 Profits)
- Standard corporate tax rate: 25%
For eligible SMEs (turnover below €10 million):
- 15% on the first €42,500 of profit
- 25% on profits exceeding €42,500
Eligibility conditions include:
- Fully paid-up share capital
- At least 75% ownership by individuals
VAT (TVA – Taxe sur la Valeur Ajoutée)
- Standard VAT rate: 20%
Reduced rates apply to specific categories:
- 10% or 5.5%, including:
- Food products
- Energy (gas and electricity)
- Passenger transport
- Accommodation services (hotels, guesthouses)
- Cultural goods and services (books, cinema, theatre)
- Energy efficiency improvement works
- 2.1% applies to limited items such as:
- Certain medications
- Television license fees
Capital Gains Tax on French Property (2026):
french tax 2026
Exemptions
- Sale of a main residence is fully exempt
Calculation of Taxable Gain
The acquisition cost includes:
- Purchase price
- Transaction costs (actual or flat 7.5%)
- Renovation/improvement costs:
- Actual costs if supported by invoices
- Flat 15% if property held for at least 5 years
Holding Period Reductions
- Full exemption from income tax after 22 years
- Full exemption from social charges after 30 years
Additional Tax on High Gains
| Capital Gain (€) | Additional Tax |
|---|---|
| 50,000 – 60,000 | 2% (with adjustment) |
| 60,000 – 100,000 | 2% |
| 100,000 – 110,000 | 3% (with adjustment) |
| 110,000 – 150,000 | 3% |
| 150,000 – 160,000 | 4% (with adjustment) |
| 160,000 – 200,000 | 4% |
| 200,000 – 210,000 | 5% (with adjustment) |
| 210,000 – 250,000 | 5% |
| 250,000 – 260,000 | 6% (with adjustment) |
| 260,000+ | 6% |
Tax Rates
- Income tax: 19%
- Social charges: 17.2%
Non-residents are subject to the same rates as residents.
Local Property Taxes in France: french tax 2026
Two main local taxes apply:
- Taxe d’Habitation: paid by the occupant
- Taxe Foncière: paid by the property owner
If the owner occupies the property, both taxes apply.
Wealth Tax in France (IFI – 2026)
Applicable to net real estate assets exceeding €1.3 million.
| Net Wealth (€ million) | Tax Rate |
|---|---|
| 0.8 – 1.30 | 0.50% |
| 1.30 – 2.57 | 0.70% |
| 2.57 – 5.00 | 1.00% |
| 5.00 – 10.00 | 1.25% |
| 10.00+ | 1.50% |
Adjustment Mechanism
For wealth between €1.3M and €1.4M:
Reduction = €17,500 – (1.25% × net wealth)
Tax Scope
- Residents: taxed on worldwide real estate
- Non-residents: taxed only on French property
IFI is declared alongside the annual income tax return.
Taxation of Capital Income
Investment income (interest, dividends, capital gains) is generally:
- Declared in the annual tax return
- Taxed under the progressive income tax scale
- Reduced by any withholding tax already paid
Dividends
Two options:
- Flat tax: 12.8%
- Progressive tax scale after a 40% allowance
Social Contributions
- Currently 18.6% on dividend income
-
Need assistance in French tax 2026 ?
