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.
Very friendly and helpful people, quick answers and good work – Thank you
The tax law is admittedly complicated for a foreigner living in France, it is comforting knowing that a professional like Eliane and her team are on the job. They delivered on all aspects; alwaysprofessional, client focused and with a smile on their face. A pure pleasure doing business with Elitax!
When I was appointed to my job at the headquarters of my company in Paris, it was a big change in my life. A new country, a different culture, totally different ways of life and practices… Luckily, my company had already taken care of this and agreed with some consultant companies to support me in various aspects of this change. Elitax was my consultant on tax subjects. As I learned during my stay in France, tax is a very heavy subject and you cannot survive alone as an expat if you don’t have proper support. That’s where Elitax, i.e. Eliane and her team, come into the picture: They made a very thorough presentation of the tax system in France. I learned clearly my responsibilities and consequences of failure to comply with the requirements. They used their expertise to support me in the preparation of my tax declaration, relations with the authorities, representing me in the tax related communications with the authorities, both during and after my stay in France. I even remember being supported by Elitax team to understand the yearly French obligation to pay tax if you own a TV set at home! Oh, those were the days! Finally, I would like to thank Eliane for her support. She was one of the good people who made my life easy during my stay in France.
After many disappointing experiences with so called “bilingual accountant,” I was finally introduced to Eliane. She understood my situation as an owner of the second house in France and my tax position as a UK citizen straight away and helped me towards the right direction. Apart from the efficiency and accuracy of her work, I also appreciate her friendly and caring approach very much. I used to find the French tax declaration on my rental business as a burdensome duty but now with Eliane, it has become much less of a burden! I highly recommend her firm to anyone who, like me, not very competent in French to deal with the complicated tax issues in France.