All people who live in France must pay their taxes in France, and whatever their nationality. All of their income is then taken into account for the calculation of taxes.
Taxes: tax residence in France
Taxes in France concern French citizens whose tax domicile is in France, but also foreign nationals under certain conditions.
Determine tax residence for taxes
From the point of view of taxes, and to establish one's fiscal domicile in France, one must fulfill certain conditions. If one of these conditions is fulfilled, then the person concerned is considered as domiciled in France.
- The habitual residence (or that of the family) or the main place of residence is on French territory.
- To exercise a professional activity, salaried or not, in France.
- The center of economic and personal interests lies in France.
As a result, one does not choose one's tax residence, it actually derives from several conventional and legal criteria. The non-resident tax in France is then taxed only on his income from French sources. The remuneration he receives in return for an activity on French soil is indicated in a French tax return.
A majority of international tax treaties then provide for what is known as a temporary mission clause. Employees who stay less than 183 days in France are not subject to a tax on income earned in connection with this activity.
How is the tax calculated in France?
The tax in France is calculated on the basis of the various incomes of the tax home. They can be from various sources: wages, pensions, rent, income from land, etc. The tax home corresponds to the taxpayer and his spouse, but also to his children being declared dependent. Then, the total income of the household is divided according to the number of shares.
In a tax return, one share per adult and half a share for the first two dependent children. Each child from the third dependent child corresponds to one share. The tax rate applied therefore depends on the size of the household and income.
The progressive tax scale is set between 0 and 45%. In France, taxpayers are taxable on their French income and their foreign income, regardless of their nationality.
Solidarity tax on wealth
ISF is a tax due by natural persons who have assets exceeding the threshold defined in 1er January. People who have their fiscal domicile in France will pay the ISF for all their property located in France and outside France (according to international conventions). Double taxation is of course avoided in the absence of an international convention.
People whose tax domicile is not in France will only be taxed for their property located on French soil. These are then corporeal movable property, immovable property and immovable real rights. It may also concern claims on a debtor located in France as well as on securities issued by a legal person whose registered office is in France, or by the French State.
Finally, the shares and shares of companies and legal entities that are not listed on the stock market and whose assets consist of a majority of real estate rights and real estate located in France are also listed.
Taxes of people residing in France
Persons residing in France and whose fiscal domicile is on French soil must complete and complete their tax return in France.
The French tax system
Each person residing in France will therefore be in a situation similar to that of French taxpayers. Their income is all taxable: income from French and foreign sources.
These residents must register with the tax office. As a result, if they pay taxes in France, they also enjoy benefits such as the various tax cuts and allowances provided for and the authorization to recognize the expenses deductible from their total income.
The regime of foreign executives
It happens that foreign executives come to work in France. For five years, they are not taxable on the income they receive in France. The professional executives concerned by this tax measure in France are:
- People who are primarily engaged in activity and require specific skills. Most often, the areas of expertise in question have difficulties recruiting in France.
- People who invest in the capital of companies since the 1er January 2008. Certain financial conditions are still to be met.
- Employees recruited abroad by a company based in France.
- Officers and employees called abroad for the purpose of holding a position in a company present in France.
The tax regime for "impatriates"
A specific tax regime applies to people who settle again in France after a posting abroad from 1er January 2008. Each person who relocates to France sees his additional remuneration linked to the temporary secondment be exempt from tax at 30%. This rate can rise to 50% for certain foreign income.
In addition, wealth outside France is also exempt from tax during the first five years in France.
Tips
Whatever its situation, it is always better to seek the advice of the French tax authorities. She will be able to determine the status to apply to a foreign tax household that has come to settle in France. It is also possible to consult tax treaties according to the country of origin of the foreign national. In this case, the consulate can provide useful answers as to the particular provisions of each.
To conclude
Every person who has a tax domicile in France must therefore pay his taxes in France. All that is required is that the taxpayer's (or his family's) main residence is on French soil. It may also be his economic interests or the staffas well as his professional activity. Foreigners who settle and work in France must therefore make their tax return in France.
