Topic 3 Key players in the taxation system
There are three main types of personal taxes in France:
- French income tax (impôt sur le revenu)
- Social security contributions (charges sociales/cotisations sociales)
- Tax on goods and services (taxe sur la valeur ajoutée, TVA in France)
You also have to pay occupier’s tax (taxe d’habitation) or French property tax (taxe foncière).
You are liable to pay taxes in France if:
- France is your main place of residence or home. If your spouse and children live in France and you work abroad, you may still be considered a French tax resident.
- You are resident in France for more than 183 days in a calendar year – not necessarily consecutively.
- Your main occupation is in France.
- Your most substantial assets are in France.
France’s income tax rates depend on whether you are single or married, whether you have kids (and, if so, how many), as well as your income and whether you are self-employed or not.
| French income tax bands | tax rate |
|---|---|
|
Up to €10,225
|
0%
|
|
€10,226–€26,070
|
11%
|
|
€26,071–€74,545
|
30%
|
|
€74,546–€160,366
|
41%
|
|
€160,367 and above
|
45%
|
As you can see from the table above, income tax is a progressive tax: the higher your income, the more the tax will represent an increasing share of your income. The objective is to tax households with high incomes more heavily than those with low incomes, the increase in tax being more than proportional to that of income.
Income tax is calculated by family, called the tax household, i.e. taking into account the income received by all the members who compose it. If you are not married or in a civil union (PACS), then you will be taxed individually.
Foreigners living and working in France must typically register and pay into French social security in exchange for certain government benefits, including healthcare. The French social security system, which the French familiarly call la Sécu, has different categories or régimes.
The five main elements to the French social security system:
- the general scheme (régime général), which covers most employees and students;
- the self-employed scheme (régime autonome) and sickness insurance;
- unemployment and supplementary pension schemes;
- agricultural schemes (régime agricole);
- special employee schemes (régimes spéciaux), for civil servants and military personnel
Employees receive coverage through the compulsory general scheme for:
- Sickness
- Maternity and paternity
- Family benefits
- Accidents and occupational diseases
In addition, they receive coverage from the unemployment scheme managed by Pôle Emploi and old-age pension.
If you’re living in France permanently in a regular situation with at least 2 dependent children – legitimate, illegitimate, fostered or adopted – you’re entitled to family benefits for your children up to the age of 20.
The allowance is not dependent on your income but its amount varies according to age, number of dependent children and household income. In the overseas departments, aid is paid from the first child. To benefit from the aid, you need to make a request to the Caisse d’Allocation Familiale (CAF). If accepted, the amount is automatically paid on your bank account every month.
For reference, in 2022 the amounts are:
- For 2 children at charge: 139,84 € if your resources are less than 70 074 €
- For 3 children at charge: 319 € euros if your resources are less than 75 913 €
- For 4 children at charge: 498,16€ if your resources are less than 81 752 €
For more information, see: www.caf.fr