Tax in France

Who is the tax authority in France?

The Direction générale des Finances publiques (DGFiP) is the principal tax authority of France, operating under the Ministère de l'Économie et des Finances. DGFiP merged the former Direction générale des Impôts and the Direction générale de la Comptabilité publique in 2008 and now handles assessment, collection, and enforcement across personal income tax (impôt sur le revenu), corporate tax (impôt sur les sociétés), value-added tax (TVA), wealth-related taxes, and inheritance and gift tax. The taxpayer-facing portal is impots.gouv.fr. Conseillers fiscaux and avocats fiscalistes are the regulated French tax-advisor categories. Customs and excise duties (including the Plastic Packaging Tax and EU CBAM administration) are administered by the Direction générale des douanes et droits indirects (DGDDI), a separate authority [SC1][SC2].

What is the French tax year and the filing deadline?

The French tax year for individuals is the calendar year. The online déclaration de revenus (Form 2042 family) is filed in May–June following year-end, with deadlines staggered by département groupings: the earliest dates fall in late May, the latest in early-to-mid June. Paper returns from the small minority still permitted to use them are due in mid-May. The actual filing dates are announced annually by DGFiP. France operates a Pay-As-You-Earn-style withholding system for most personal income (the prélèvement à la source, in force since 1 January 2019); the May–June déclaration reconciles withheld amounts against assessed tax, producing a refund or balancing payment in September. The taxe foncière (property tax) and any taxe d'habitation balance for second homes are due in October. Corporate tax (impôt sur les sociétés) returns are due within three months of fiscal year-end, or 15 May for calendar-year companies. VAT returns are filed monthly, quarterly, or annually depending on régime size.

How is French tax residency determined?

Under Article 4 B of the Code général des impôts (CGI), an individual is treated as French tax-resident if they meet any one of three tests: their household (foyer) or principal place of residence is in France; their principal professional activity is exercised in France; or the centre of their economic interests is in France [SC8]. Each test stands alone. Treaty residency tie-breakers under France's bilateral DTAs apply where two jurisdictions both treat a person as resident. Residents are taxed on worldwide income; non-residents are taxed on French-source income only, generally at non-resident schedules. France uses an exit-tax regime under Article 167 bis CGI on emigration of holders of substantial corporate participations (above EUR 800,000 of unrealised gains, or holdings above 50 percent in any company), with deferred-payment options. Concept of foyer fiscal — the household — operates as the unit of personal income tax assessment, not the individual: married couples and civilly partnered (PACS) couples file jointly by default, with dependants assigned a quotient familial that lowers effective rates.

How does French personal income tax work?

Personal income tax (impôt sur le revenu) operates through the foyer fiscal and the quotient familial mechanism. Net taxable income is divided by the number of household parts (one part per adult, half a part per dependant child for the first two, then one part each from the third), the resulting per-part figure is run through a progressive bracket schedule, and the result is multiplied by the number of parts back. The 2025 bracket schedule (applied to 2024 income) is: 0 percent up to EUR 11,497, 11 percent up to EUR 29,315, 30 percent up to EUR 83,823, 41 percent up to EUR 180,294, and 45 percent above [SC4]. The Contribution exceptionnelle sur les hauts revenus (CEHR) adds a surtax of 3 percent on the band of income between EUR 250,000 and EUR 500,000 (single) or EUR 500,000 and EUR 1,000,000 (couple), and 4 percent above those thresholds.

Investment income for individuals is by default subject to the prélèvement forfaitaire unique (PFU, the flat tax), at 30 percent comprising 12.8 percent income tax and 17.2 percent social levies (CSG-CRDS-prélèvement de solidarité). Filers can opt to apply the progressive bracket schedule to investment income instead — this option is generally beneficial for filers in the 0 percent or 11 percent bracket. Real-estate gains on a primary residence are exempt; gains on other real-estate are taxed at 19 percent income tax plus 17.2 percent social levies, with allowances tapering the base after five years of holding. Wealth-related tax was narrowed to the IFI (Impôt sur la fortune immobilière) in 2018, applying to net real-estate wealth above EUR 1.3 million.

How does French corporate tax work?

The standard corporate income tax rate (taux normal) is 25 percent, in force since 1 January 2022 after a multi-year reduction trajectory from the historical 33.33 percent rate [SC4]. A reduced rate of 15 percent applies to small and medium enterprises (turnover under EUR 10 million) on the first EUR 42,500 of taxable profit. The Contribution sociale sur les bénéfices (CSB) adds 3.3 percent on corporate-tax assessments above EUR 763,000 for larger groups, producing a top combined rate of approximately 25.825 percent. France implemented the OECD Pillar Two Global Anti-Base Erosion (GloBE) rules through Articles 223 VJ et seq. CGI for fiscal years beginning on or after 31 December 2023 [SC5]. Thin-capitalisation rules under Article 212 bis CGI cap interest deductibility at 30 percent of EBITDA, with carve-outs and group-ratio relief. The Crédit d'impôt recherche (CIR) provides a 30 percent tax credit on R&D expenditure up to EUR 100 million and 5 percent above; the credit is refundable for SMEs and reportable for larger entities.

How does indirect tax work in France?

Value Added Tax (Taxe sur la Valeur Ajoutée, TVA) is the principal indirect tax. The standard rate is 20 percent; an intermediate rate of 10 percent applies to restaurant meals, hotel rooms, public passenger transport, and home-renovation work; a reduced rate of 5.5 percent applies to most basic foodstuffs, books, school canteens, and energy-renovation work; a special rate of 2.1 percent applies to reimbursable medicines, press publications, and live-theatre performances [SC4]. The French VAT system aligns with the EU VAT Directive; the EU One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) apply to cross-border B2C supplies. Mandatory VAT registration applies to all taxable persons making taxable supplies in France; the franchise en base de TVA small-business exemption applies under turnover thresholds (EUR 85,000 for trade-and-restaurant, EUR 37,500 for services in 2025; the unified threshold reform from 2025 has been postponed pending implementation). Real-estate transfer tax (droits de mutation) ranges roughly 5–6 percent depending on département.

How is crypto taxed in France?

The French treatment of crypto for individuals turns on the occasional-versus-habitual characterisation. Occasional disposals by individuals (the typical case) are subject to the PFU at the 30 percent flat rate (12.8 percent income tax + 17.2 percent social levies) on net gains, with a method-specific cost-basis rule [SC5]. Filers can opt into the progressive schedule. Habitual or professional crypto-trading activity is taxed in the BNC (bénéfices non commerciaux) category at progressive personal-income rates plus social levies, which can produce materially higher liability than PFU treatment. Mining is reported in the BNC category as ordinary income on receipt at fair market value. Receipt of crypto as compensation, staking, or airdrops is taxable as ordinary income on receipt at fair market value, becoming the cost basis for any later disposal. NFT treatment follows the underlying asset class. France introduced specific crypto declaration obligations on Form 3916-bis for holders of non-French-domiciled crypto accounts.

How does France handle tax treaties?

France maintains a network of approximately 120 comprehensive Double Taxation Conventions, the densest network in continental Europe alongside Germany [SC5]. Most French treaties follow the OECD Model with French-specific reservations, particularly on the credit-versus-exemption method (France typically applies the credit method, with some legacy exemption treaties remaining). France signed and ratified the OECD Multilateral Instrument; the MLI's modifications apply to many French treaties for periods from 2019 onward, including the Principal Purpose Test for treaty benefits. Foreign tax credit relief is generally claimed through the déclaration de revenus on French-resident worldwide income. France maintains the historical particular-purpose conventions for inheritance tax with several jurisdictions in addition to the income-tax network.

What are the common penalties and pitfalls for foreigners?

Late filing of a déclaration de revenus carries an immediate 10 percent surcharge on assessed tax; if a mise en demeure is issued and not complied with, the surcharge rises to 40 percent; for hidden activity (occulte) the surcharge is 80 percent [SC1]. Late payment carries an interest charge of 0.20 percent per month plus a 10 percent surcharge. Inaccuracy penalties run from 10 percent (good-faith error) to 40 percent (deliberate inaccuracy) to 80 percent (fraudulent maneuvers). Specific failure-to-disclose penalties apply for non-French bank accounts (EUR 1,500 per undeclared account; EUR 10,000 if the account is in a non-cooperative jurisdiction) and for the Form 3916-bis crypto declaration (EUR 750 per undeclared account, EUR 1,500 if balance over EUR 50,000).

Common pitfalls for arrivals to France include: missing the foyer-fiscal household-filing default when one spouse remains tax-resident in another jurisdiction; underestimating the breadth of the centre-of-economic-interests test in Article 4 B CGI when a person retains substantial business interests outside France; failing to file the non-French-account declaration when a US 401(k), UK ISA, or other foreign-resident account is held; and assuming the EU-VAT-OSS regime exempts a domestic French registration when local supplies cross thresholds. For complex cross-border or migration scenarios, common approaches discussed by practitioners include reviewing the three Article 4 B tests and treaty tie-breakers with a credentialed French tax pro before relying on a single-test conclusion.