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France, officially the French Republic, is a country whose territory consists of metropolitan France in Western Europe and several overseas regions and territories. The metropolitan area of France extends from the Mediterranean Sea to the English Channel and the North Sea, and from the Rhine to the Atlantic Ocean
The country has long been a global centre of art, science, and philosophy. It hosts the world's fifth-largest number of UNESCO World Heritage Sites and is the leading tourist destination, receiving around 83 million foreign visitors annually.
France is a developed country with the world's sixth-largest economy by nominal GDP, and tenth-largest by purchasing power parity. In terms of aggregate household wealth, it ranks fourth in the world. France performs well in international rankings of education, health care, life expectancy, and human development
Highlights
Residency Programs (2)
Cost of Life
Taxation overview
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Tax system
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Residence-based taxation
Countries with a residence-based taxation levy tax from your worldwide income for as long as you're a tax resident of that country. This is the most common taxation system.
Tax residence definition varies from country to country. General rule is you're a tax resident of a country if you spend 183 days or more in it in a year.
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Tax summary
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Personal income tax (PIT) (Impôt sur le revenu, IR)
Progressive tax up to 45% above €157,806 ($187,845). Plus surtax and social surcharges
Total income is split according to family status (i.e. 'the more children you have, the less tax you pay’). Under income-splitting rules, total taxable income is divided by the number of shares awarded to the taxpayer: one share for a single person, two shares for a married taxpayer without children, half a share for each of the first two dependent children, and one full share for the third and each subsequent child. Thus, the income of a married taxpayer with three children is split into four.
Corporate income tax (CIT) (Impôt sur les Sociétés, IS)
28%. Plus a social contribution of 3.3% assessed on the amount of CIT. For corporations having revenue in excess of €250,000,000 ($297,588,226), 31% rate applicable to tax result in excess of €500,000 ($595,176).
Value-added tax (VAT) (Taxe sur la Valeur Ajoutée, TVA)
20%
Social security contributions
The French social security system is composed of various schemes providing a wide range of benefits. On average, the employer's share of contributions represents 45% of the gross salary. On average, the employee’s share of French social contributions represents approximately 20% to 23% of the remuneration. However, since the contributions are assessed using various ceilings, the average rate will decrease as the gross salary increases.
Withholding tax (WHT)
- Resident WHT rates: Not applicable on Dividends, Interests and Royalties
- Non-resident WHT rates: 30% on Dividends, 0% on Interests, 33.33% on Royalties
Capital gains tax (CGT) (La Flat Tax)
- As Corporation: subject to standard Corporate income tax (CIT) rate
- As Individual: 30%. Plus exceptional income tax for high earners at 4%
Net wealth/worth tax (Import sur la Fortune Immobilière, IFI)
Progressive tax up to 1.5% above €10,000,000 ($11,903,529) on Real estate assets
Individuals who qualify as tax residents of France on 1 January of a given year are liable to tax on their worldwide real estate properties, unless otherwise provided by a tax treaty.Non-residents of France are only liable to the tax on their real estate properties located in France. IFI is due if net taxable wealth exceeds €1,300,000 ($1,547,459) (2020 tax year) on 1 January of that year.
Inheritance and Gift tax
No inheritance tax is due for inheritance between spouses (or partner of a Pacte civil de solidarité [PACS]) and for inheritance between brothers and sisters living together under specific conditions.
Progressive tax rates are applicable after a rebate of €100,000 ($119,035) when beneficiaries are direct dependants.
Between non-related parties, the rate is 60% after an allowance of €1,594 ($1,897) granted to each beneficiary. This allowance is not applicable in case of gifts.
Controlled foreign companies (CFCs)
- Controlled by Corporation: Yes. French corporations are required to include in their taxable income profits made by their more than 50% owned foreign subsidiaries and branches. The CFC rules are only applicable if the foreign legal entity is in a country with a privileged tax regime. A privileged tax regime is a tax regime in which taxable income of a foreign entity is at least 50% or lower of the income tax liability that would have been incurred in France.
- Controlled by Individual: Not provided
Disclaimer: This tax summary is for information only and shall not be construed as tax advice. Every situation is different. Should you consider moving to France, we highly recommend you liaise with a local tax advisor to confirm your future tax regime.
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Year of Assessment
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YA 2021