Understanding exactly what tax you have to pay when you become a resident of a new country is no easy task, especially in a country such as France, with multiple types of tax and stipulations to break down.
But, with a little expert guidance, you can easily discover which taxes matter to you and ensure you never fall on the wrong side of the law. At Elitax, we’ve spent almost two decades helping expatriates and new French residents get their head around the tax system — and our tax advisors are ready to help you, too.
So, below is some key guidance on taxes in France to familiarise yourself with French tax policies and be certain to meet deadlines and avoid penalty charges. If you have any more questions or queries regarding tax payments in France, feel free to contact Elitax today.
In France, income tax is levied on households, rather than individually.
French tax law is, in many ways, flexible to individual circumstances. For example: in the years of marriage, separation, or the death of a spouse, there are tax changes you must consider.
As a resident of France, an individual is subject to five main types of direct taxes:
In France, income tax of year N is always paid in its entirety the following year. Up to 2018, there is no income tax withheld by employers, nor other institutions (pension funds, banks, financial institutions etc.).
At the submission of the yearly income tax return, the taxpayer declares the income earned during the preceding year, then the Tax Authority computes and calculates the income tax to pay. There are ways and means to reduce the final tax bill via aspects such as deductible charges, the income splitting system (quotient familial), considering the number of individuals in the tax household (single, married couple, spouses who have signed a civil law contract, number of dependents), the tax credits and, finally, the tax reductions.
However, income tax withholding will be introduced again in France in 2019 for the first time since its abolition in 1948. Consequently, during 2019, income tax of both the years 2018 and 2019 will be due by the taxpayers in France.
It is obvious that this would create huge financial pressure on the taxpayer. Therefore, the French Government has decided not to tax income earned during the year 2018, creating what it calls “L’année Blanche”, or the “White Year”.
So, good news for newcomers to France: 2018 is the year to come and work in France, as you will save one year of income tax! If you are moving to France from the new tax year starting April 6, for UK citizens, this will result in nine tax-free months. This opportunity will occur for the first time in 70 years and will surely not happen again in a lifetime! If you are thinking of moving to France or not, this is the year — and with the new laws on newcomers’ tax incentives, you can drastically reduce your income tax to pay for the next eight years after 2018.
We here at Elitax would be very glad to help position you safely in the French tax system. Want to get started with our expert tax advisors? Call our Paris-based office on +33 (0)1 43 71 10 05, or send us a message today.
We’ve helped hundreds of clients resolve their tax issues.
As an expatriate, surrounding yourself with a set of professionals is of vital importance. Eliane guided me from my arrival to my departure through the complicated French fiscal systems, I felt in the best hands, never had any issues with the tax authorities. Eliane’s patience and service are second to none. Even today, after 2 years of my departure from France, I keep Eliane as a contact and ask for her advise which she offers at a very reliable speed. I highly recommend using Elitax as your tax parter.
Elitax was recommended to me by a friend just before I moved to Paris several years ago. From the onset Eliane was extremely helpful and articulate — her command of English is as superb as her knowledge of international tax laws and bilateral agreements between EU nations. She quite quickly dissolved any apprehension I might have had and explained things in a quite lucid manner. Elitax has handled my affairs ever since and I can not recommend their services more highly.
We have used Elitax.com for the past three years. At first we were unsure if a firm based in Paris, so far from us would be the correct thing to do. Our French language skills are limited but we had been assured (by other ex-pats) that our tax declarations would be simple and could easily be completed without engaging a professional firm. That is so far from the truth, it is almost a lie! We soon discovered just how the rules are littered with potholes ready to swallow the naive declarant whole. A very simple mistake, in entering our income in the wrong format, led to a very frightening tax investigation. At the conclusion of which we were just advised that our tax forms should be done by someone who knew what they were doing. Elitax were our saviours. Their advice and forms are simple to follow. The firm is efficient and are always available if assistance is needed. They ensure that you are fully aware of your responsibilities in relation to your declarations and they work well to ensure that submissions are made seamlessly. Their online client space is easy to follow. We cannot recommend Elitax enough.
I am a U.S. citizen living and working in Paris. Navigating the French tax system as an expatriate can be overwhelming. Elitax took all of the stress out of preparing and filing French tax returns. They understand the needs of expatriates and made the process very easy. They were thorough in preparing my tax forms and very prompt in responding to my questions. Their reliability and expertise make them easy to recommend. Thank you Elitax!