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General Information on Taxes in France

Get informed about tax law in France with Elitax’s simple guide

If you’re new to France, the tax system may seem unfamiliar or confusing. But with a little guidance from Elitax, you’re certain to meet deadlines and avoid penalty charges.

We’ve been experts in French tax law for nearly two decades, so we know the system inside and out. If there are any updates to policies that affect our clients, we’re the first to know and take action.

Take a look at our general information on taxes in France and familiarise yourself with French tax policies. If you’d like some extra guidance, get in touch today and we’ll be happy to help.

Income tax guidelines for new residents

In France, income tax is levied on households, rather than individually.

Most married couples are required to file a joint income tax return. However, if the spouses live separately and the marriage includes a settlement that allows each spouse to administer their separate properties individually, each party must file a separate income tax return.

The following list describes the different forms of tax households in France:

● Married couples with or without child(ren) or other dependent(s)

They form a single tax household and must file a joint income tax return.

● Married couples under a settlement allowing each to administer their separate properties, and who do not live under the same roof

They form two tax households and must file two separate income tax returns.

● A PACSed couple living together under a Common Law contract

They form a single tax household and must file a joint income tax return.

● A couple living together without any legal contract (concubinage)

They form two tax households and must file two separate income tax returns.

● A single individual

He/she forms one tax household and must file an individual income tax return.

If you’re not sure which category you fit into, contact Elitax today and we’ll gladly help get your tax affairs in order.

Special circumstances that affect French tax returns

French tax law is, in many ways, flexible to individual circumstances. In the years of marriage, separation and the death of a spouse, there are tax changes you must consider.

● The year of marriage

Spouses have the option to file two separate French income tax returns, or one joint income tax return. Regardless of the decision that a couple makes, the tax return(s) must cover the whole fiscal year.

The couple should make calculations and opt for the most tax-efficient income tax return. For help choosing the right option for you and your partner, grab a free tax consultation with Elitax today.

● The year of divorce or separation of spouses

The spouses must file two separate income tax returns. Taking control over your own finances after a separation or divorce is essential, so make sure you meet the income tax deadline.

● The year of the death of one spouse

The surviving spouse must file a joint income tax return for the whole fiscal year. It must include the income earned from January 1st to the date of the spouse’s death and the full year’s income for the surviving spouse.

The five main types of direct taxes in France

As a resident of France, an individual is subject to five main types of direct taxes:

1- Residence tax and TV tax = Taxe d’habitation + tax audiovisuelle

Payable by the occupant of the dwelling (either the owner or the tenant as of January 1st of the year in question) by November 15th each year.

Residence tax and TV tax are sent as one bill directly to the taxpayer’s domicile by October 15th and payable by November 15th of each year. TV tax is due only if you own a TV set. If not, you declare on your tax return that a TV set is not available at your place of residence.

Residence tax is determined by the size, location and other factors relating to the accommodation (floor level, elevator, etc.).

TV tax is a fixed amount: €138 in 2017.

2- Real estate tax = Taxe foncière

Payable by the owner, whether they occupy the property or not.

Real estate tax notifications are sent out by mid-September and are payable from October 15th of each year.

Real estate tax is determined by the size, location and other factors relating to the property (floor level, elevator, etc.).

3. Business Tax : Contribution Foncière des Entreprises – CFE

Business tax (CFE) is payable if you or another member of your household is involved in a business (e.g. freelance teaching). Notification is sent directly to the taxpayer’s domicile by mid-November and is payable by December 15th each year.

4. Wealth Tax (From € 1,300,000) – Impôt de Solidarité sur la Fortune (ISF)

Payable if the taxpayer’s worldwide wealth reaches the threshold of €1,300,000 as of January 1st, 2017. Visit our wealth tax information page for more details.

5. Personal Income Tax – Impôt sur le revenu
The tax year in France runs alongside the calendar, from January 1st to December 31st. The deadline for income tax returns is May 31st for the previous tax year. For example, for the tax year that runs from January 1st to December 31st, 2017, the deadline would be May 31st, 2018.

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