Understanding Your French Tax Notice as a Non-Resident

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If you are a non-resident earning income from French sources, your tax situation can seem complex. This guide helps you understand the key elements of your French income tax notice and the rules that apply to your situation.

Minimum Tax Rate for Non-Residents

Under Article 197 A of the French General Tax Code, non-residents are taxed on their French-source income using the same progressive tax scale as residents, including the family quotient system. However, a minimum tax rateapplies regardless of your situation:

  • Mainland France:

    • 20% for net taxable income up to €28,797 (2023 income).

    • 30% beyond that threshold.

  • French Overseas Departments (DOM):

    • 14.4% below €28,797.

    • 20% above this amount.

During the year of departure from France, you’re considered a resident until the departure date, and a non-resident from that date through December 31. Your tax notice will include a reference to the minimum 20% rate applied for non-residents.

Using a Lower Average Tax Rate

You may qualify for a reduced average tax rate if you can prove that the French tax rate on your global income(including both French and foreign income) is lower than the non-resident minimum rate.

How to Apply:

  • Online Filing:

    • In Step 3 (“Revenus et charges”), tick the box “Bénéficier du taux moyen d’imposition (s’il est plus favorable)”.

    • Enter the total income per category from both French and foreign sources.

  • Paper Filing:

    • Fill box 8TM on form 2042-C.

    • Use form 2041 TM to detail each income source (available on impots.gouv.fr).

The administration will only apply the average rate if it results in a lower tax liability than the minimum rate.

You can also submit a claim to the Non-Resident Tax Office (SIPNR) with documentation supporting your claim. Be aware that processing times may be extended due to high volumes.

Withholding Tax and Exempt Income

Under Article 197 B, withholding tax applies to wages, pensions, and similar income:

  • Mainland France: 0%, 12%, and 20%

  • Overseas Departments: 0%, 8%, and 14.4%

On your tax notice:

  • The 0% and 12%/8% rates appear as “retenue à la source libératoire”. These are not taxed further.

  • The 20% or 14.4% rate amounts may be credited against your final tax due.

Example:

For €146,557 in net income (after the 10% deduction), only €100,000 would be taxable if €46,557 was taxed at a 12% rate.

If your total withholding exceeds the tax owed under the average rate, you can request a refund of the excess amount.

Multiple Income Sources: Withholding Adjustments

If you have more than one income provider (employer, pension payer, etc.), each applies withholding separately. However, your total income should be aggregated for correct tax assessment.

Your tax notice will show any required adjustments under:
“Pluralité de débiteurs – régularisation de la retenue à la source”.

This ensures the withholding is recalculated fairly across all income sources.

Actual Expenses and Taxable Income

If your income has been subject to withholding, only the portion taxed at 20% or 14.4% is used to determine your taxable income.

As such, any deductible actual expenses you declare are only partially deductible, in line with the taxable portion of your income.

Deductions, Relief, and Tax Credits for Non-Residents

Generally, non-residents cannot deduct expenses or benefit from tax credits on French-source income (Article 164 A). However, exceptions apply:

  • PPRT Tax Credit: If you incurred costs to comply with technological risk prevention plans on rental properties, you may be eligible (for expenditures between 2010 and 2023).

  • Pinel/Denormandie Investments: If made while still a resident, you can retain the benefit even after becoming a non-resident.

  • Loc’Avantages: Available since 2022, provided the lease agreement was signed before leaving France.

  • Business Tax Credits: Available to non-residents with self-employed or business income in France.

Taxable and Reference Income

Your reference taxable income (based solely on French income) is shown on the first page of your tax assessment notice. A breakdown of your taxable income and how it was calculated is also included in the notice.