FAQs

The French tax year for personal income tax follows the calendar year and runs from 1 January to 31 December. Companies may choose whichever date that they find convenient as their year-end.

No. If you become resident in France on 31 May, you are deemed to be fiscally resident from 31 May to 31 December, not before. You are only required to declare your worldwide income for the period for which you are French resident (i.e. 31 May to 31 December). The full lower rate tax bands will be applied to your income and will not be reduced by time apportionment.

Yes. If you are working for a French employer, they will declare your salary to the French tax authorities and deduct income tax at source under the French PAYE system. In the absence of a prior year’s return on which to calculate a personalised tax rate, a standard rate or emergency rate is applied. 

This tax rate is calculated using the standard tax bands, based on your monthly salary only (not taking into account any additional sources of income) and assumes that you are single with no dependent children. 

Once you have submitted your first French income tax return and received a tax assessment, any differences between tax deducted at source (from your salary) and tax owed will result in a tax refund or balancing payment.

Yes.

The process can be summarised as follows:

1.  An initial meeting with you, in person or alternatively by videoconference;
2.  You give us all relevant documentation e.g. payslips, bank interest, rental summaries, etc; We need to receive everything at least one month before the deadline.
3.  We then prepare your French tax return using the relevant forms including any necessary appendices;
4.  We post to you the tax return for your review along with a mandate authorizing us to sign the return on your behalf once approved by you;
5.  We will submit your tax return electronically to the tax office for you.
6.  Your French tax assessment (known as an avis d'imposition) will be sent to you the following Autumn. You should then forward this to us for checking before any tax is paid. We can also advise re making payment of the tax.

The French income tax return form (form n°2042) can be downloaded from the government website here.

The completed form should then be posted to the local tax office which deals with your address in France.

You may locate your local tax office here.

If you are already in the French tax system (and assuming you have not recently moved house), the contact information for your local tax office is shown on the front page in the top-right hand corner of your first tax assessment.

French residents may create an account on www.impots.gouv.fr following receipt of their first tax assessment, using the online access number (numéro d’accès en ligne) displayed in the top right-hand corner. They may thereafter submit their declarations via this online portal. The tax authorities are phasing in obligatory electronic submission for French residents.

James Howes & Co can also submit tax returns electronically via our accounting software.

Should you prepare your tax return via your online account, the information already known about you by the tax office will be pre-populated (such as your personal details and certain sources of income already declared to the authority by e.g. your bank or employer).  You may choose to accept or update/override the pre-populated information.

It continues to be compulsory to submit a personal tax return each year.

The tax return submitted in May–June each year for your prior year’s income is used to set the tax rate applied at source (prélèvement à la source) for certain types of income, notably salaries, pensions, unemployment benefits, and self-employment. You will see this rate on your tax assessment issued in the autumn.

Late payment will generally incur a fine of 10% of the amount due. This is called a majoration. Furthermore, late payment interest will be applied from the day after the original payment deadline, calculated at the standard rate set by the tax authorities.

Yes. The process would be the same as if the tax return were not late. But expect to be charged the 10% majoration usually incurred on late submission.

Yes it may be possible, but there are very strict restrictions.

The rules are set out in Article 4B of the French tax code (Code Général des impôts) and Article 3 of the UK / France Double Tax Treaty of 19 June 2008. The criteria are not as black and white as the UK rules now are and the French authorities are likely to regard a French salaried individual as French resident for tax purposes, unless he/she can prove otherwise.

From the outset, your intention must be to not become French resident. All of the criteria below must be met, and are shown in order of importance.

• Your household base (foyer) must remain outside France. By foyer is meant not only your personal main residence but also the place of residence of your spouse and dependent children. It is therefore easier to show non-residency when one's foyer abroad consists of spouse and dependent children, rather than you as a sole individual.
• The majority of your earned income must be derived from employment outside France i.e. in this way French earned income could be for the provision of additional services that support your main profession, such as a British doctor who owns a practice in Manchester, but lectures monthly at a Paris university.
• Your centre of economic interests must remain outside France. The definition of this quite wide and refers to one's substantial assets e.g. principal investments, assets, owned practices/ businesses.
• You must only be in France for an absolute maximum of 183 days per calendar year. Any more than four months of habitual residence will bring you prima facie within the definition of a resident of France.

It should be noted that if you are not French Resident you are not entitled to French health care.

No.  However , it is strongly recommended.

After activating your personal space on the French tax website (impots.gouv.fr), you will be asked to provide a RIB (Relevé d’Identité Bancaire, or French bank account identifier) to set up direct debit payments for income tax, property tax, and social charges, or to receive refunds.  While not strictly required to create the account, not having a French bank account can make it difficult to interact fully with the tax system, and you may face delays or even inability to register certain payment methods.

The same applies to utilities.  Most electricity, gas, water, internet, and mobile phone providers in France require a French bank account for monthly billing by automatic debit. Some may not accept foreign IBANs or may require manual payments, which can be cumbersome and lead to service interruptions if payments are missed.

While it is technically possible to use an account from another SEPA-zone country, in practice, many French administrative and commercial systems do not fully support foreign IBANs, or do so inconsistently.

You will be liable to wealth tax on property if:

• You are French resident and your global real estate is worth more than € 1,300,000 (see note below).
• You are non-French resident but you own French real estate worth more than € 1,300,000

IFI only applies to real estate and related property rights. This includes:

• Houses, apartments, land;
• Shares in property-holding companies (like SCIs or certain real estate funds);
• Property held through trusts or foreign structures.

If you are French resident and own your principal private residence, an abatement of 30% of the market value is available when calculating your net wealth.

If you move to France and have not been tax resident here in the last five years, only French-situs property is taxable for the first five years of residence. Assets outside of France are exempt during that period.

Your assets and any eligible debts are valued as of 1 January each year.

In principle, loans used to buy or renovate property can reduce the taxable amount. However, recent changes have made the rules stricter:

• The loan must relate directly to the taxable property.
• Interest-only or bullet loans may be only partly deductible.
• Loans with no clear repayment schedule, or those between family members or companies you control, may be limited or rejected.

If you are financing property in France through loans or planning to use a holding company, it is wise to get professional advice to ensure your structure is tax-efficient and compliant.

The wealth tax return is filed as an annex to your annual income tax return and accordingly follows the same filing deadlines (see above).  Generally the deadline varies between 20 May and 5 June depending where you live and whether you submit your return online or by post.

If you are not required to file a French income tax return, you must still file an IFI return separately, using the same timeline.