Direct Taxation
Residents in France, whether French or foreign nationals, are taxed on their global earnings. However, there is a double taxation agreement between the UK and France which prevents those who still have tax liabilities in the United Kingdom from being taxed twice on the same element of income. Its full title is the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.
The French tax authorities consider an individual to be resident if that person spends over 183 days in France in any calendar year.
The French tax year runs from 1 January to 31 December and residents pay taxes on their income for the preceding year and not the current one. French income tax is a progressive tax with rates of the net salary after Social Security contributions. However, there are a wide range of rebates and exemptions granted on gross income which allow a more moderate rate of taxation. (A standard deduction of 10% and a further deduction of 20% on the balance can be applied for most salaried tax payers.)
Families in France benefit from a system known as "Le quotient Familial" (family quota) through which a taxable income is divided into "units" reflecting the family status of the tax-payer. For example, people living alone (single, widowed etc) represent one unit and are taxed on the whole of their income. A married couple are considered as two units and their joint income will be divided by two. In addition, the first two children count as one-half a unit each and each additional child is counted as a full unit.
Impôt sur la Fortune (Wealth Tax). A standard rate of Wealth Tax is applicable to residents in France - further information can be obtained from the local tax office.
Impôt sur les Bénéfices (Corporation Tax). There is a single rate of Corporation tax - further information can be obtained from the local tax office.
Indirect Taxation
Taxe sur la Valeur Ajoutée - T.V.A. (VAT). There are two rates of VAT in France, a reduced rate of 5.5% and the standard rate of 19.6%.
Further information
Further advice in the UK may be obtained from the French Embassy in London or in France from the regional tax office.| < Prev | Next > |
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