The statutory laws in France bear the tax system as a declaration system embodies in the General Tax Code (Code Général des Impôts) and the French Tax Procedure Code (Livre des procédures fiscales).
The French government had adopted electronic tax declaration and payment procedures that have speed up the tax collection process. The investigative power of tax authorities was further increased by their adoption of a new Anti-Tax Fraud Act in 2013. This resulted in the tax fraud criminal penalty being raised.
International transactions bear a greater potential for tax evasion and are therefore given more attention by the French tax revenue authority.
Here, we will zoom in on personal and corporate tax, namely:
- Personal income tax
- Corporate tax
Personal income tax
The assessment of personal income tax is based on the total income of the members of the tax household. A tax household is a family entity made up of one person, a couple and their children or dependants and whatever regime is operational in a household.
In France, people are deemed to be domiciled if they have a home there, their main place of abode is in France, they are professionally active in France or the center of their economic interests is in France.
People domiciled in France are taxable on their worldwide income. Those who are not domiciled in France are taxable on the income they get from French sources only. The provision of tax treaties protects them from double taxations.
Here are the tax rates based on net income as per the year 2015. They apply to every fractional income slice in each part of the household.
Income share in Euros | % tax rate |
| <= 9,700 | 0 |
| 9,701 – 26,791 | 14 |
26,792 – 71,826 | 30 |
| 71,827 – 152,108 | 41 |
| >152,108 | 45 |
Here are exceptional contributions:
| Civil status | Income in Euros | %tax rate |
| Singles | 250,000 – 500,000 | 3 |
| Singles | >500,000 | 4 |
| Married couples | 500,000 – 1M | 3 |
| Married couples | >1M | 4 |
Other taxes include:
- Capital gains – the rates range from 0% to 45%
- Social security surcharges – it applies to French residents and the rate is 15.5%
- Deductions and allowances – it is based on family circumstances, investments, and expenses
- Net wealth tax – this applies for households whose wealth with net worth is more than 1.3M Euros
Corporate taxes
Companies and legal entities pay annual corporate taxes on all their generated profits.
These are the conditions under which these taxes are imposed:
- At a rate of 33.33% for all activities
- At a rate of 15% for the first 38,120 Euros profits for small and medium-sized enterprises which have a turnover >7.63M or have at least 75% of the company owned by individuals or companies that satisfy the former condition.
Corporations also pay for other contributions, including:
- Social contributions: this amount is dependent on the amount of corporate income tax paid and is exempted for small businesses. Its rate is usually 3.3%.
- Solidarity contribution: the rate for this is 0.13% of the corporations, net turnover and is exempted for small businesses.
- Research and development tax credits: the rate is 30% for expenses up to 100M Euros and 5% for expenses above 100M Euros.
- Withholding tax: a tax treaty can provide a lower rate. But if not, it is usually 30%
This serves as a guideline. Given the broad French tax framework, you may need to make further consultations now and then regarding areas in which you have concerns.
