Understanding Withholding Tax and the PASDSN Procedure

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Prerequisites for Withholding Tax

To comply with the withholding tax system, foreign and French companies must complete several formalities:

  1. Obtain a SIREN/SIRET number – If your company does not already have one, you must register first.

  2. Create a professional account at impots.gouv.fr – Required to manage withholding tax payments.

  3. Have a SEPA-compliant bank account – You must provide your bank with a signed SEPA B2B mandate before any tax payment.

  4. Appoint a tax representative when required – Expand their remit to cover withholding tax if needed.

Companies can also designate a proxy, assigning them the authority to handle withholding tax obligations.

To determine the exact steps you need, consult the simplified procedural diagram for withholding tax compliance.

Filing and Paying Withholding Tax

The official platform for social security and withholding tax declarations in France is net-entreprises.fr. All companies, French or foreign, must use this portal to submit statements and make payments related to social security and withholding tax.

Filing Online: DSN or PASRAU?

1. Single Staff Reporting Statement (DSN)
The DSN is a payroll-based declaration covering all social security contributions for employees. Any company paying social security contributions in France must file the DSN via net-entreprises.fr.

Through this single platform, businesses and their proxies or tax representatives can submit and pay all social contributions. Registration is required before filing.

2. PASRAU: Withholding Tax for Other Income
The PASRAU scheme allows companies liable for withholding tax—but not paying social security contributions in France—to report necessary information for calculating and remitting withholding tax.

PASRAU is particularly relevant for foreign companies employing staff seconded to France without local social security contributions. Monthly declarations are filed through net-entreprises.fr once registration is complete.

Important: Create your net-entreprises.fr account early to request employee-specific withholding rates. The DGFiP (Public Finances Directorate General) provides these rates electronically.

Paying Withholding Tax

Withholding tax payments are processed via SEPA B2B direct debit, linked to your DSN or PASRAU declaration.

Key points for foreign employers:

  • Your SEPA bank account must match the one registered in your impots.gouv.fr professional account.

  • Submit a signed SEPA B2B mandate to your bank before paying withholding tax. Failure to do so can result in rejected payments and penalties.

Withholding Tax for Foreign Companies – FAQ:Pasdsn

Which companies are liable?
All companies paying taxable salaries in France must collect and remit withholding tax.

What is the withholding tax?
Effective 1 January 2019, withholding tax aligns tax collection with the employee’s actual situation for the year (income and status changes) without altering tax calculation rules. This eliminates the one-year lag between income earned and tax paid.

From January onwards, employers must:

  • Apply the DGFiP-provided withholding rate to taxable salaries.

  • Report collected tax monthly via DSN (by the 5th or 15th of the following month) or via PASRAU (by the 10th).

Which authority oversees foreign companies?
Foreign companies without a permanent establishment in France fall under:

Service des Impôts des Entreprises Étrangères (SIEE)
Cellule PAS
10 rue du centre – TSA 20011
93465 Noisy-le-Grand cedex

Note: The SIEE does not assist with net-entreprises.fr registration. For filing or payment issues, consult the net-entreprises.fr knowledge base.

Registering for Withholding Tax:Pasdsn

If you are unknown to French tax authorities:

  • Foreign employers paying taxable salaries must register to obtain a SIRET number, create a professional account at impots.gouv.fr, and file via net-entreprises.fr.

  • If your only obligations in France are tax-related, register with the Non-Resident Tax Directorate (DINR) via formalites.entreprises.gouv.fr.

If you already have a SIRET number:
No additional registration is required. Use your SIRET number to access your professional account and manage PASRAU or DSN filings.

Professional Account at impots.gouv.fr

A professional account is mandatory to:

  • Enter SEPA bank account details for withholding tax payment.

  • File and pay taxes through the PASRAU or DSN system.

Important: Only SEPA B2B direct debits are accepted. Other payment methods are not allowed. Print and sign the SEPA mandate, sending it to your bank to avoid payment issues.

Resources for setting up your account:

  • Tutorial: Creating my secure professional account in basic mode

  • English sheets coming soon:

    • Setting up professional account (EP-SL)

    • Managing bank accounts (SL8)

    • SEPA mandate template (SL)

Your account also provides access to previous withholding tax declarations and payments.

Appointing a Tax Representative

When is a representative required?:Pasdsn

Foreign companies must appoint an accredited representative for obligations like VAT or withholding tax unless they are established in:

  • The European Union

  • EEA countries with mutual tax assistance agreements (Iceland, Norway)

The representative must:

  • Be a taxpayer in France

  • Be accredited by French tax authorities

  • Agree contractually to handle withholding tax and, if necessary, make payments on your behalf

Existing representatives

If your current representative handles other taxes (e.g., VAT), they are automatically authorized for withholding tax. Only one representative may be appointed at a time.

Representative responsibilities

A tax representative can:

  • File PASRAU or DSN statements on your behalf

  • Calculate and remit withholding tax from employees’ salaries

Representatives cannot use their own DSN to report taxes for a company they represent.

Appointment process

  • Provide a signed original power of attorney to authorize the representative.

  • Accreditation applications must be sent to SIEE, Cellule PAS, Noisy-le-Grand cedex.

  • The administration will notify directly whether the accreditation is approved or rejected.

Appointing a Proxy:Pasdsn

Companies in the EU or some non-EU countries may appoint a proxy instead of a tax representative. The proxy can:

  • Handle formalities on your behalf under your responsibility

  • Require a French-language, exclusive power of attorney signed by an authorized person

Note: If the proxy pays social security contributions via DSN, your company must use its own net-entreprises.fr account to file and pay PASRAU withholding tax.

By following these procedures, foreign and French companies can ensure compliance with withholding tax obligations using PASRAU/PASDSN, avoid penalties, and streamline tax administration.

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