French Income Tax and Being Tax Resident in France

Information on becoming a taxpayer in France, when and how to submit your return and details on the tax bands applied to your income. Also find out how other incomes may be taxed (pensions, rental income, interest, dividends), social charges and benefits...

French income tax and the way it is paid underwent an overhaul at the start of 2020. The main change is a reduction in the income tax rates approved by the Conseil Constitutionnel on the 28th December 2019.

In January 2019, France implemented a Pay-As-You-Earn system (PAYE) in line with other European countries where tax is automatically deducted from a salary or pension.

It is up to the employer or pension provider to deduct the tax. The rate is determined by the tax department after completing a tax return.

This can be done via the Impots Gouv Website

Or by calling: 0809 401 401

The following types of income will be subject to the PAYE system

     Employment income (i.e Salary)

    Taxable state benefits (e.g unemployment, sickness)

    Retirement income (pensions, lifetime annuities)

    Maintenance payments

    Rental income

    Non-French income taxable in France (including UK Pensions paid to a UK retiree resident in France)

    Business profits

Couples will need to decide whether they want to be taxed individually or as a household, as their tax rate will be based on this 2018 declaration.

Information on the income tax system and how it is calculated is available on the French Government website.

How to calculate your taxable income in France

Most income, including earnings, pensions, rental income and investment income, is taxed at progressive scale rates that range from 0 percent to a top rate of 45 percent.

Income Tax Rates

Income tax rates are usually only set at the end of the tax year to which they relate, or sometimes even after the tax year is over.

There are five different tax bands.

For income declared in 2019, payable in 2020, the tax bands are as follows

  • Up to €10,064                                   0%
  • Between €10,065 - €27,794          11%
  • Between €27,794- €74,517           30%
  • Between €74,518 - €157,806        41%
  • Above €157,807                               

 

For income declared in 2020, the tax bands are as follows:

  • Up to €10,064                                 0%
  • Between €10,065 - €25,659         11%
  • Between €€25,660- €73,369        30%
  • Between €73,370 - €157,806       41%
  • Above €157,807                             45%

The bands are only part the tax calculation. Also taken into account is status and the number of dependants if any.

Information on calculating tax brackets is available on the French Government website.