Taxation of Foreign Income for French Tax Residents
Under French tax law and subject to applicable international tax treaties, individuals who are tax residents of France (as defined in Article 4 B of the French General Tax Code) are liable for income tax on all income earned worldwide. Non-residents, on the other hand, are only taxed on income sourced in France.
Declaring Foreign Income: Form 2047
If you reside in France and earn income from outside the country, you are required to complete Form 2047 to declare this income.
“Foreign income” includes all earnings, profits, and capital gains obtained outside mainland France and its overseas departments, or income received directly from another country or territory. This applies regardless of where the assets are located, where the funds are invested, or where the activities are performed.
All members of your tax household must declare such income if it is taxable in France. You also need to submit Form 2047 if you receive foreign income (excluding salaries and pensions) that is exempt from tax in France but used to determine your taux effectif (effective tax rate).
How to Complete Form 2047
In boxes 1 to 6 of Form 2047, report all income taxable in France. Transfer this income to the appropriate sections of Form 2042, grouping it with similar income earned in France if applicable.
Additionally, complete section 6 or 7 of Form 2047 based on the double taxation agreement between France and the country of origin. These sections determine whether the tax credit matches the French tax or the foreign tax paid.
In box 8, indicate any tax-exempt foreign income that affects your taux effectif, and report it on line 8TI of Form 2042 (excluding wages and pensions).
For exempt foreign salaries or pensions considered for the taux effectif, you do not need to declare them on Form 2047. Instead, include them on lines 1AC and following of Form 2042C, without listing them on line 8TI of Form 2042 — even if you declare other foreign-source income on 8TI.
Currency Conversion
If your income is in a currency from a non-Eurozone country, it must be converted into euros using the exchange rate on the date of receipt.
Avoiding Double Taxation
When foreign income is taxed abroad under a treaty, the tax paid is not deductible from your income but may give rise to a tax credit deductible from your French income tax. Two main cases apply:
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Tax credit equal to the foreign tax paid:
Declare the gross income before foreign tax on Form 2047 and transfer it to Form 2042. Enter the foreign tax credit on line 8TA of Form 2042. -
Tax credit equal to the French tax owed on the foreign income:
Again, declare the gross amount on Form 2047 and report it under the appropriate income category on Form 2042. Mention the full amount on line 8TK of Form 2042.
Cross-Border Workers
Special rules apply to individuals classified as cross-border workers under tax agreements with Germany, Belgium, Spain, Italy, and eight Swiss cantons. According to these treaties, salaries are taxed in the country of residence.
Note: The Geneva canton is not part of this agreement. Therefore, individuals residing in Geneva but working in France — or French residents working in Geneva — are taxed in the country where the work is performed.
Declaring Foreign Property and Investment Income
If you earn property income from abroad, include the addresses of your foreign properties in Form 2047. Then, declare the related income on Form 2044, as you would for French property income. Summarize this income in paragraph 4 of Form 2042.
For foreign investment and securities income, report it under the appropriate categories in Form 2047. However, if the income from foreign securities is received in France through French financial institutions, declare it directly on Form 2042 without using Form 2047.
