Income tax in France: an overview

Anyone living in France is required to submit an annual French income tax return. Non-residents must also declare certain types of French-source income, most commonly rental income from property in France.

It is your responsibility to declare your income correctly. Lack of awareness is not accepted as a valid excuse by the French tax authorities.

You become liable for French tax from the point at which you are considered tax resident in France, usually when you move there on a permanent basis. Where you declare – and potentially pay – tax is determined by objective criteria, not personal choice.

How the French tax system works

Once registered in the French system, tax is typically collected in two ways:

• Tax at source (prélèvement à la source) on income such as salaries and pensions

• Monthly or quarterly instalments taken directly from your bank account for other types of income (based on previous declarations)

An annual tax return must then be submitted each spring, covering the previous calendar year. This allows the authorities to calculate your final liability, taking into account:

• all sources of income

• your household situation

• any allowances, deductions or tax credits

France applies a system of progressive tax bands, with rates rising to a top rate of 45%, after an initial tax-free allowance.

Your first tax return

In your first year, you must declare worldwide income received from the date you became resident in France.

You must also declare:

• any bank accounts held outside France

• certain foreign savings and investment products, including life assurance policies

These are reported in dedicated sections of the tax return, separate from income declarations.

Tax credits and additional charges

France offers a range of tax credits and reductions, including for:

• employing help in the home

• certain energy-efficiency improvements (such as installing electric vehicle charging points)

• charitable donations

After applying allowances and credits, a significant proportion of households pay little or no income tax.

An additional surcharge applies to higher earners, starting at €250,000 per year for a single person (double for couples).

How to declare

Most people must now declare online via the official tax website, though paper forms are still accepted for a first declaration or in limited circumstances.

France has tax treaties with many countries, including the UK, to prevent double taxation.

When are you tax resident in France?

In general, you are considered tax resident once you move to France with the intention of making it your main home. Short stays or holidays do not count.

If your situation is unclear, the French authorities look at several criteria:

1. Your main home (foyer)

This is where you live on a habitual basis. It is typically:

• your principal residence

• where your partner and dependent children live

• a property available for your use (not primarily rented out)

2. Time spent in France

If the above is unclear, the next test is whether you spend most of the year in France.

While 183 days is often used as a guideline, it is not decisive on its own. What matters is whether you spend more time in France than in any other country.

3. Centre of economic interests

Other factors include where you:

• work or run a business

• hold your main investments

• manage your financial affairs

No single factor is always decisive; residency is based on the overall picture.

Practical points to bear in mind

• Tax residency applies from the date you arrive, not after a set number of days

• If there is uncertainty, the tax authorities may assume you were present in France unless proven otherwise

• It is sensible to avoid borderline situations and keep clear records of your movements

It is also possible, in some cases, for members of a couple to have different tax residencies, depending on their personal circumstances.

The ‘tax household’ 

In France, tax is assessed at the level of the foyer fiscal (tax household).

This typically includes:

• a single person, or

• a married couple or those in a recognised civil partnership (Pacs),

• plus any dependent children

All members declare together on a single return, although income is itemised individually.