Get to know the author
This post was created in collaboration with our trusted partner Géraud Nayral and his team from French Tax Online.
Whether you’re just toying with the idea of moving to France or have a concrete plan to do so, learning about taxes in France beforehand is a wise idea. Considering the tax implications of your decision now will save you the stress of rushing to catch up once you arrive.
Below, we’ve put together a comprehensive yet easy-to-read guide on US expat taxes in France. Read on as we dive into French tax residency, deadlines, income tax rates, and more.
Snapshot of taxes in France
- Primary tax forms: Cerfa n°2042
- Tax deadline: Typically mid-May (changes each year per tax code)
- Reporting website: impots.gouv.fr
- Administrative language(s): French
- US Tax treaty? Yes
- Totalization agreement? Yes
Determining French tax residency & liability
Anyone who meets at least one of the following criteria meets the legal definition of a French tax resident:
- Your habitual abode is in France, OR
- France is the primary country in which you spend time, OR
- You carry out a professional activity in France, OR
- France is the center of your economic interests
Tax residents pay French taxes on their worldwide income, while non-residents only have to pay French taxes on French-sourced income.
Understanding the French tax system and deadlines
Generally, all French tax residents (and those who earn French-sourced income) must file an annual income tax return. Most taxpayers file Cerfa n°2042, although any taxpayers who have arrived or departed France within the last calendar year must file Cerfa n°2042-NR.
These forms are usually pre-populated with information from data already provided to the French tax authorities by various sources throughout the year. If the estimated tax calculation is correct, you can confirm it in a few clicks. Otherwise, you can add and edit income earned and other data.
The tax deadline changes each year, although it is generally in mid-May. There are three deadlines for the 2023 tax year (aka the taxes you pay in 2024):
- Zone 1 (departments no. 01 to 19, non-resident taxpayers): Thursday, May 23
- Zone 2 (departments no. 20 to 54, including Corsica): Thursday, May 30
- Zone 3 (departments no. 55 to 974/976): Thursday, June 6
To file your return and pay taxes, you’ll use the impots.gouv.fr portal. Before you file, note that you must apply for a French tax number (numéro d’identification fiscale, or NIF).
Taxation of income in France
France employs progressive tax rates, in which the more you earn, the higher your taxes are. French income tax rates for the 2023 tax year are as follows:
| Income (EUR) | Income (USD) | Tax Rate |
| Up to €11,294 | Up to ~$12,271 | 0% |
| Between €11,295 & €28,797 | Between ~$12,272 & ~$31,288 | 11% |
| Between €28,798 & €82,341 | Between ~$31,289 & ~$89,464 | 30% |
| Between €82,342 & €177,106 | Between ~$89,465 & ~$192,427 | 41% |
| Over €177,106 | Over ~$192,427 | 45% |
These withholdings are usually taken through payroll for those who work for a French employer.
Note:
Individuals earning more than €250,000 (~$271,600) and families earning more than €500,000 (~$543,223) may be subject to an additional 3% to 4% tax, a Contribution exceptionnelle sur les hauts revenus or Exceptional Contribution on High Incomes.
Deductions & allowances
Some common French tax benefits for US expats living in France include:,
- Charitable contributions: 66% of qualifying contributions, with limitations based on net taxable income
- 75% of contributions up to €1,000 (~$1,086) made to charitable organizations that give food to the needy
- Childcare: 50% of childcare expenses up to €3,500 (~$3,802) per year per child under six years old
- Schooling: €61 (~$66) for dependent collège students, €153 (~$166) for dependent lycée students, and €183 (~$199) for dependent university students
- Domestic help: 50% of housekeeping expenses incurred up to €12,000 (~$13,039) or €15,000 (~$16,298) for the first year of employment. Additional allowances for dependent children, dependent elders, and disabled taxpayers
- Home adaptations: 25% of expenses incurred when making your home more mobile or safe for the older or disabled people
There are also different types and amounts of tax relief for:
- Dependents
- Business and real estate investments
- Greening your home
- Starting or purchasing a business
- Child support & alimony
Other taxes in France
Self-employment taxes
Self-employed individuals in France pay several different types of tax, including:
- Income tax: 0% to 45%, depending on income after considering available deductions and allowances.
- Business property tax (CFE): €223 (~$242) to €2,229 (~$2,422), depending on the value and location of business property,
- Social security contributions: 12.8% for sales and related activity; 22% for trade, commercial, or professional services
- Contribution to vocational training (CFP): .1% for sales and related activity, .2% for private and commercial services, 0.3% for trade activity
- Chamber of Commerce duties: .007% to .048%, depending on business activity and region
There are various tax breaks for self-employed individuals to help offset these expenses.
Social security taxes
French employees typically have about 20% to 23% of their paycheck withheld to fund social services.
Note:
France’s totalization agreement with the US prevents American expats living in France (and vice versa) from paying social security taxes to both countries.
Capital gains taxes
Capital gains taxes in France are complex, and rates vary depending on factors like asset type, time held, and net income. The standard rate for investment income is a flat tax of 30% (12.8% income tax, 17.2% social taxes), with an additional 4% for very high earners.
Low earners, on the other hand, may choose to pay at average income tax rates. They can also receive a rebate of 50% if they’ve held the asset for two to eight years or 65% if they’ve held it for more than eight years.
There are also special capital gains tax regimes for gains arising from the sale of:
- Shares in a small/medium French company: Taxed at average ordinary income rates with a rebate of up to 85% available depending on length of ownership
- Primary residences: Generally exempt
- Secondary residences: Exempt or partially exempt in certain situations
- Real estate held more than five years: Rebate ranging from 6% to 100% depending on time held
VAT
The standard value-added tax (VAT) rate in France is 20%, although there are discounted rates available:
- 10% VAT: Catering and personal transportation
- 5.5% VAT: Certain medicines, books, food products, utilities, etc.
- 2.1% VAT: Medicines reimbursed by French social security
Note:
If you sell goods and services, you must charge VAT to clients based inside the EU and remit the payments to the government.
Property taxes
Some of the property taxes in France include:
- Property purchases: Typically 7% to 8% for older properties, 2% to 3% plus 20% VAT for new construction
- Real estate wealth tax (IFI): .5% to 1.5% on properties (or real estate holdings) exceeding €1,300,000 (~$1,413,099)
- Housing tax: Applies only to tenants of secondary homes at average rates of about €10 to €20 (~$11 to ~$22) per square meter, depending on location
- Property tax: Applies to all property owners at at average rates of about €10 to €20 (~$11 to ~$22) per square meter, depending on the location
Inheritance, estate, & gift taxes
French inheritance, estate, and gift taxes are also famously complex. The tax rates you pay will depend on factors like your relationship to the donor/deceased, the tax residence of the donor/deceased, your own tax residence, and the value of the gift/inheritance/estate.
Tax rates range from as little as 5% on estates of €8,072 (~$8,767) for parents, children, and grandchildren to as much as a 60% flat rate on non-related beneficiaries.
Spouses are generally exempt from inheritance taxes.
Beneficiaries receive tax-free allowances ranging from as little as €1,594 (~$1,731) for non- and remotely-related beneficiaries to as much as €100,000 (~$108,612) for parents, children, and grandchildren.
Exit tax
In some cases, those who transfer their tax domicile outside of France may be subject to a flat exit tax of 30%. This tends to kick in when you:
- Have lived as a tax resident of France for six of the ten previous years, AND
- Have unrealized capital gains that exceed 50% of the original investment (ex. a €100,000 investment in shares now worth €160,000, a 60% increase, is subject to the exit tax) OR a total value of unrealized gains exceeding €800,000
Note:
If you return to France, you will generally receive a reimbursement of tax paid.
How to avoid double taxation as an expat in France
Moving to France doesn’t mean you’re free from your US tax obligations, as all American citizens and permanent residents who meet the minimum income reporting threshold must file a US tax return annually, even if they live and have tax residency abroad.
If you also file taxes in France, this could result in double taxation. While the US does have a tax treaty with France, a tricky clause renders it largely useless to US citizen taxpayers. Most US expats in France are better off claiming one of the following tax breaks-
🗞️ Newsworthy Note:
A December 18, 2023 court appeal held that some Americans living in France can use the taxes they pay in France to lower (or erase) an extra U.S. tax on investments called the net investment income tax (NIIT). However, the U.S. government is challenging that decision, so the tax benefit might not stick. (12)
The Foreign Tax Credit
The Foreign Tax Credit (FTC) offers Americans dollar-for-dollar credits for any foreign income taxes they pay. This allows them to essentially subtract what they’ve paid in foreign income taxes from their US tax bill.
In a country like France where taxes are higher than in the US, this usually not only eliminates your US tax liability — it also gives you surplus credits. You can then apply these credits toward future US tax bills on foreign income.
The Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion (FEIE) lets Americans abroad exclude a portion of their foreign-sourced earned income from taxation. For tax year 2023, you can exclude up to $120,000 per taxpayer. In tax year 2024, that figure increases to $126,500.
To qualify for the FEIE, you must meet either the Physical Presence Test or Bona Fide Residence Test. Doing so also makes you eligible for the Foreign Housing Exclusion or Deduction, which allows you to exclude additional income based on qualifying housing expenses like rent, utilities, and more.
Reporting obligations
For many Americans, a move abroad can mean new or different reporting obligations. For example:
- Foreign Bank Account Report (FBAR): Americans with over $10,000 in foreign financial accounts must file an FBAR.
- Statement of Specified Foreign Financial Assets (Form 8938): Americans living abroad with over $200,000 in foreign financial assets on the last day of — or over $300,000 in foreign financial assets at any point during — the tax year must file Form 8938.
Resources
- France – Individual – Residence
- HOW SHOULD I FILE MY INCOME TAX RETURN IF I RETURN TO FRANCE?
- WHAT IS THE DEADLINE FOR FILING MY TAX RETURN?
- Tax scale What is the income tax?
- Income tax in France – it’s income tax, but not as we know it
- France – Individual – Other tax credits and incentives
- Guide to French Income Tax
- Taxes and contributions for the self-employed—what you need to know
- France – Individual – Other taxes
- I’m buying a property in France: what taxes should I pay?
- The complete guide to French property taxes – Taxe d’Habitation, Taxe Foncière and CFE refund
- United States – IRS Appeals Decision Allowing FTC Claim Against Net Investment Income Tax
