In France, taxes are not deducted at source (yet). They depend on three criteria: your age, your earnings and you family situation.
It is possible to pay over ten months from January to October:
- If you were already liable the previous year, check the your Individual account on the www.impots.gouv.fr website (in French). Choose you “Payer” (“Pay”) section and click on “Adhérer au prélèvement” (“Sign up for direct debit”). If you have any question, you can contact the Direct Debit Service Centre (CPS, Centre Prélèvement Service).
- If not, if you weren’t taxable on the income tax the previous year, to be able to apply to the monthly paiement, you will first need to estimate your taxes to pay for the year, thanks to the simulator on the www.impots.gouv.fr website. You can then contact the Direct Debit Service Centre (CPS, Centre Prélèvement Service) to set up your direct debit.
More information is available on the governement’s website, at this link.
You can also choose to pay your taxes in three payments, even if you are liable for the first time. You will need to address a written request to the Trésor Public and ask to spread the payment in three different payments, while defining a payment schedule.
FRENCH INDIVIDUALS COMING BACK TO FRANCE
Did you you there was a new tax system giving access to tax-exemption, dedicated to impatriates? Here is a bit of information on this new system, created by the law on the Modernisation of the economy of August 4th, 2008.
The law of Modernisation of the Economy of August 4th, 2008 created a new status for “impatriates”, codified under the article 155 B of the General Tax Code. It replaces the status previously created by the article 81B from the same Code (which still applies to wage-earning individuals who started their contract before January 1st, 2008). This new status is opened to employees and directors they are fiscally linked to if their contract started after January 1st, 2008.
Who is eligible to the “impatriates” tax system?
- employees and directors they are fiscally linked to (directors mentioned in 1°, 2° and 3° of the b section of article 80 ter of the GTC: for example Chairman of the management board, Director-general, delegate Director-general, directors with a minority or egalitarian investment…)
- called by a company implemented abroad to a company implemented in France, which shares links with the company of origin
- or directly hired abroad by a company implemented in France.
IN WHAT COMPANY MUST THE IMPATRIATE BE EMPLOYED?
The company must have its HQ or an establishment, regardless of its legal form, in France.
WHAT ARE THE CONDITIONS RELATIVE TO FISCAL DOMICILE?
- The concerned individuals must not have fiscally resided in France for the 5 civil years preceding the year of the start of their contract, in accordance with the article 4 B of the GTC and de facto according to an international tax convention.
- Starting from the beginning of their contract, they must be fiscal residents in France, according to the a and b sections of the 1 of article 4 B of the GTC, namely: having their household or main residence place there and have their main professional occupation in France.
WHAT PARTS OF THE IMPATRIATE’S WAGE CAN BE TAX-FREE?
1. The supplementary bonus related to impatriation
What is it? It is a bonus corresponding to wage bonuses, in kind or in cash, directly linked to the temporary exercise of a professional occupation in France.
How much is it? At a rate of its real amount, stated in the work contract or in an amendment, established prior to the beginning of the contract in France or on option of an assessed amount, deemed equal to 30% of the total net wage. This option is however unavailable for employees and directors called by a foreign company to a company established in France. The exemption is however subject to the condition that the impatriate’s wage submitted to the income tax must be at least equal to the wage perceived for similar functions in the same company, or if not in similar companies established in France. In this case, the difference between the net wage of the ‘impatriation bonus’ and the reference wage is added to the wage subject to tax.
Determining the impatriation bonus depends on modalities decided by the employer, who must be able to justify by all means of its existence and of its amount.
2. The fraction of the wage related to an occupation abroad
The part of the wage related to an occupation abroad while the impatriate is in France is tax-free as long as the different stays abroad are exclusively and directly linked to the company where the concerned individual effectively works.
NB: the ceiling of the tax exemption on the impatriation bonus and the fraction of the wage related to the occupation abroad.
The tax exemption on the impatriation bonus and on the fraction of the wage related to an occupation abroad cannot exceed 50% of the total net taxable wage, according to the regulation on treatment and wage of the concerned year, before application of the system intended by the article 155 B of the GTC.
Or on option of the taxpayer, the tax exemption related to the occupation abroad cannot exceed 20% of the taxable wage of the concerned individual (excluding the exonerated impatriation bonus).
3. Tax exemption on some « passive income » perceived abroad and on some capital gain from transfer of transferable security and of socials rights held abroad
Under certain conditions during the application period of the special tax system of some elements of their wage, impatriates can benefit from a tax exemption on their wage up to 50% of the amount of some passive income perceived abroad and on some capital gainsperceived during the transfer of securities and of social rights abroad.
The concerned passive income and capital gains are the following:
- Products of the intellectual or industrial property mentioned at the 2° and 3° of the 2 of the article 92, the payment of which is operated by an individual established outside of France in a State or territory having set with France a fiscal convention which includes a clause of administrative assistance to fight off fraud and tax avoidance.
- The wage of transferable assets, the payment of which is operated by an individual established outside of France in a State or territory having set with France a fiscal convention which includes a clause of administrative assistance to fight off fraud and tax avoidance.
- Gains perceived during the transfer of securities and of social rights, when the custodian or, if not, the company whose securities are being given up, is established outside of France in a State or territory having set with France a fiscal convention which includes a clause of administrative assistance to fight off fraud and tax avoidance.
APPLICATION PERIOD OF THE SYSTEM
Tax exemption on such gains is applicable until December 31st of the 5th year following the beginning of the contract in France of the beneficiary in each of the years during which the impatriates is fiscally resident of France, according to a and b of 1° of the article 4B of the GTC.
For more precisions, check our source material: Direction Générale des Finances Publiques (in French)
FOR NON-FRENCH NATIONALS COMING TO FRANCE FOR THE FIRST TIME
Note that the taxes are calculated on your incomes of the previous year. Which means you won’t pay any during the first year you will spend in France! However, keep in mind that you will have to pay taxes one year after you leave too.
You will have to get registered for you first declaration. Be careful: you can only do your first declaration online if you have received a letter from the tax administration stating that you can declare your taxes online. If you haven’t, you cannot make your declaration online, you will have to get a paper declaration form:
- either by downloading it on www.impots.gouv.fr, in the “Recherche de formulaire” section (“Looking for forms”), which is accessible from the homepage or on the left menu;
- or by getting it from the centre of public finances (the tax service for individuals) of your place of residence.