A lot of people are wondering about how they will pay their income tax as an ex-pat in France. The good news is that the French government has some pretty straightforward guidelines for what you need to do to make sure your taxes are taken care of. However, if you don’t know much about the process, it can be a little tricky. Especially for those who are new to the country and not fluent in French.
To help make your life a little easier, we’ve put together this brief guide with everything you need to know about paying income tax as an ex-pat in France. Let’s begin!
The French Tax System
In France, there are mainly three types of taxes
- French income tax (impôt sur le revenu)
- Social security contributions (charges sociales/cotisations sociales)
- Goods and service Tax (taxe sur la valeur ajoutée TVA, or VAT, in France)
You also have to pay other taxes like property tax (taxe foncière) or inheritance tax (impôt de solidarité sur la fortune ISF).
The French Tax System For Foreigners
Non-French residents are only obliged to pay income tax in France if they have a source of income there, regardless of where it comes from. So if you’re not a permanent resident of France, you have to pay income tax on your French revenues, but not foreign ones.
You also have to pay income tax and social security contributions based on the amount of time that you spend in the country during the year. If you’re there for more than 183 days then you’ll be considered as a tax resident and you have to pay income tax on all your revenues.
Personal Income Tax Rates For Residents
If you’re a resident in France, you’ll pay income tax on all your revenues including both residential and non-residential sources. The sources can be employment, investments, dividends, bank interest, pensions, and property. You might have to pay anywhere between 11% – 41% depending on your taxable income.
Personal Income Tax Rates For Non-residents
As we mentioned, non-residents pay income tax only on their French revenues. So if you’re a non-resident and receive a salary from an employer in France, you’ll have to pay income tax on that one. However, if you earn money from another country then you won’t have to pay anything. Non-residents pay around 20% – 30% depending on their income.
How Do You File Your Income Tax in France as an Expat?
The PAYE system in France makes it really easy to file your income tax. The monthly salary you get will already have taxes taken out of it. Then all you need to do is go online at the end of the year and tell them how much your income was for the year.
It’s pretty straightforward, but if you don’t understand French then there are some options for you. If you’d like a French tax advisor to file your tax returns in France, you can easily find one.
French Income Tax Deadlines
You have to file your income tax in France every year by the deadline. In France, the deadlines can change every year, but they’re normally sometime between March and April. In 2020 there were two deadlines: 4 June for filing online returns (paper returns need to be filed by the 12th of June)
Penalties for Late Income Tax Return Filing
France is known as one of the most generous countries when it comes to its tax system. But France does have some penalties for late filing of your income tax returns.
For instance, first, you’ll receive a letter addressing that the deadline is over. After that, 10% will be added to your main tax bill.
As you can see, it’s not that hard to pay income tax in France as an ex-pat. You just need to know the deadlines and follow everything carefully.