France is one of the countries in Europe which has tax treaties with more than 100 other countries throughout the world. This helps them to reduce the taxes for their citizens who are living and working in France, just like it is for expatriates who are living and working in any of these 100+ countries.
France levies income tax on salaries, pensions (in some cases), properties, and any other taxable income. Expats who live and work in France will be subject to French tax, and they must report their worldwide incomes to the French authorities. Let’s see what are guidelines that you must follow to pay your income tax as a French Expat.
Income Tax Rates for Expats (Residents)
French residents are taxed on their worldwide income. They pay taxes on their income earned or received in France, as well as on their income that is earned outside France. They have to pay their taxes on investments, salary, capital gains, etc. Here are the tax rates:
- Up to €10,000: 0% (There are no income tax)
- €10,000–€26,000: 11%
- €26,000–€74,000: 30%to
- €74,000–€160,000: 41%
- €160,000+: 45%
Income Tax Rates for Expats (Non-Residents)
The good news for non-residents, they don’t have to pay income tax other than their French source income. That means, they don’t have to pay taxes on their income outside of France.
They are obliged to pay up to 20% income tax if their income is less than €25,000. Anything above that amount, you will be taxed at a 30% rate.
How French Expats can File Their Income Tax?
Thanks to the French PAYE system, salaried persons are not required to file their taxes manually. Their taxes get deducted from their monthly salary. But those who are running their businesses, properties, or investments must file their taxes manually before the deadlines.
If you’re required to pay your taxes manually, you will need your previous year’s income tax form (you can get it from your local tax office or download one online) and other necessary documents like your tax registration certificate and your bank statements.
The French income tax system follows the calendar year system. So the tax year starts on January 1 and ends on December 31. The tax return deadlines vary from year to year. In 2020, the paper submission deadline was 12th June and the online submission deadline was 4th June.
Penalties for Late Submission
If you don’t file your taxes on time, the tax office will charge a penalty. The amount is different from year to year. So it’s better to submit your French income tax as soon as possible before the deadline. You can be charged 10% (variable) on top of your annual income tax if you don’t pay your taxes on time.
A Few Tips for Expats
- Make sure to keep all your French income tax-related documents in one place, so you can find them easily later when you need to use them.
- Hiring a French Tax Advisor would be a good idea if you’re unaware of the income tax rules and avoid penalties
- Keep track of the deadlines. They might change depending on the year.
- You can visit the official French tax website for more information about filing your taxes as an ex-pat in France
French tax laws are pretty straightforward. You have to pay income tax depending on your residency status. France is one of the most generous countries when it comes to income tax. But France does have penalties on late payments though. So it’s better to file your tax returns on time.