The preliminary tax rates, bands and abatements for 2008 have been made available in anticipation of the definitive figures due out in December. These are based on the annual index increase announced last year, and so the following figures still need to be ratified.
Income threshold to be exempt from paying income tax:
For those under the age of 65: €8,270
For those over the age of 65: €9,040
Age allowance for persons over 65 on the 31st December 2008:
Net assessable income less than €13,950, abatement: €2,266
Net assessable income between €13,950 and €22,500, abatement: €1,133
10% expense alowance:
Pensions-minimum allowance €367, maximum allowance €3,592
Salaries-minimum allowance €413, maximum allowance €13,893
Income tax bands, applicable after applying the quotient familiale
0 to €5,852 = 0%
€5,853 to €11,673 = 5.5%
€11,674 to €25,926 = 14%
€25,927 to €69,505 = 30%
€69,506 upwards = 40%
Capital gains on investment sales
Threshold of sale value €25,000
Tax rate on gains where the sale value is in exces of the thresold 18%
Inheritance tax
Please note, as from January 1, 2008 all interspouse inheritances are now exempt from Inheritance Tax irrespective of the marriage regime between spouses, as are those between partners under a French Pacte Civil de Solidarité (Pacs) . This does not, however, remove the need for marriage regimes for the purpose of alleviating civil law restrictions, and, other than for spouses with the community marriage regime, lifetime gifts between spouses or pacsed partners do remain taxable.
Parents and children:
0 to €156,357 = 0%
€151,951 to €164,279 = 5%
€164,280 to €168,240 = 10%
€168,240 to €171,993 = 15%
€171,994 to €698,393 = 20%
€698,394 to €1,042,377 = 30%
€1,042,378 to €1,928,398 = 35%
€1,928,399 upwards = 40%
Uncles / aunts and nephews / nieces:
0 to €7,818 = 0%
€7,819 upwards = 55%
Siblings living apart:
0 to €15,636 = 0%
€15,637 to €39,611 = 35%
€39,612 upwards = 45%
Siblings, living with deceased and over 50, or disabled:
0 to €156,357 = 0%
€156,357 to €180,332 = 35%
€180,333 upwards = 45%
All others:
0 to €1,564 = 0%
€1,565 upwards = 60%
Wealth tax
New provision for foreigners coming to France mean that for the first five years of fiscal residency (law applies from
November 1, 2008) only assets in France will be assessed for wealth tax. Rates for January 2009 should be:
0 to €790,000 = 0%
€790,001 to €1,280,000 = 0.55%
€1,280,000 to €2,520,000 = 0.75%
€2,520,001 to €3,960,000 = 1.00%
€3,960,001 to €7,570,000 = 1.30%
€7,570,001 to €16,480,000 = 1.65%
€16,480,001 upwards = 1.80%
