France is known for its high quality of life, social protections, and public services—but these benefits are supported by a comprehensive tax system. Whether you are moving to France, launching a business, or managing cross-border income, understanding how taxes work is essential to staying compliant and optimizing your financial situation.

This guide breaks down the main types of taxes in France, how tax residency works, declaration requirements, and what every individual or business should know.

1. Understanding French Tax Residency

Before anything else, you must determine whether you are considered a French tax resident.
You are generally tax resident in France if one of these conditions applies:

• You spend more than 183 days per year in France

• Your main home (foyer fiscal) is in France

• Your principal economic interests are in France (work, business, investments)

• Your spouse/children live in France

Residents are taxed on worldwide income.
Non-residents are taxed only on income sourced in France.

2. The French Income Tax (Impôt sur le Revenu – IR)

Income tax is applied progressively based on brackets that change annually.
The system uses the quotient familial, which divides household income into “parts” based on family composition, reducing tax for families with dependents.

What must you declare?

• Salaries and employment income

• Self-employment or freelance income (BIC/BNC)

• Rental income (LMNP, LMP, property rentals)

• Dividends and interest

• Capital gains

• Foreign income if you are a tax resident

Declaration process

• Done once per year (typically April–June)

• Mandatory online declaration

• Income from abroad must also be reported

Prelevement à la source (withholding tax)

Since 2019, France uses a pay-as-you-earn system where tax is deducted automatically from income throughout the year.

3. Social Contributions (Cotisations Sociales)

Beyond income tax, France applies social contributions, which finance healthcare, pensions, unemployment, and family benefits.

Examples include:

• CSG: Contribution Sociale Généralisée

• CRDS: Contribution au Remboursement de la Dette Sociale

• Prélèvement de solidarité

• Social security contributions for self-employed (URSSAF)

These can represent a significant portion of total taxation, especially for freelancers and landlords.

4. VAT (TVA) in France

VAT is a major component of the French tax system.
Standard rate: 20%
Reduced rates: 10%, 5.5%, 2.1% depending on goods or services.

Who must collect VAT?

• Businesses exceeding certain revenue thresholds

• Professionals providing services or selling goods

• E-commerce activities targeting EU clients

VAT returns can be monthly, quarterly, or annually depending on turnover.

5. Corporate Tax (Impôt sur les Sociétés – IS)

Businesses operating in France may be subject to corporate tax.
The standard rate is 25%, with reduced rates on certain profits for SMEs.

Companies also face additional taxes such as:

• CVAE (gradually abolished)

• CFE (Cotisation Foncière des Entreprises)

• Payroll taxes for companies not subject to VAT

6. Property Taxes

France has two main property taxes:

Taxe Foncière (Land & Property Tax)

Paid by property owners each year.

Taxe d’Habitation (Residence Tax)

Now abolished for primary residences, but still applies to:

• Secondary homes

• Vacant properties

Property taxes vary significantly by city and region.

7. Wealth Tax on Real Estate (Impôt sur la Fortune Immobilière – IFI)

IFI applies only to real estate assets exceeding €1.3 million in net taxable value.
It concerns both residents and non-residents if they own French property.

8. Double Tax Treaties

France has treaties with many countries to prevent double taxation. These agreements determine:

• Where income must be taxed

• How foreign tax credits apply

• Avoidance of being taxed twice on the same income

This is especially important for expatriates and cross-border workers.

9. Tax Benefits, Deductions, and Credits

France offers many options to reduce tax legally:

• Family quotient (tax reductions for dependents)

• Home services and childcare credits

• Energy-transition incentives

• Investment tax schemes (Pinel, Denormandie)

• Retirement savings deductions (PER)

• Micro-enterprise allowances for freelancers

Proper planning can significantly reduce your tax burden.

10. Filing and Payment Methods

Income tax is declared yearly but paid monthly or at source. Other taxes have specific due dates:

• VAT: monthly or quarterly

• Corporate tax: quarterly

• Property tax: annually (autumn)

• IFI: during income tax season

Most payments are made online through impots.gouv.fr.

Why Understanding Taxes in France Matters

France’s tax system is detailed, structured, and benefits-based.
Proper compliance ensures:

• Legal security

• Access to healthcare and social protections

• Smooth visa/immigration processes

• Better financial planning

• Eligibility for tax breaks and incentives

• Avoidance of penalties or audits

Whether you are an expat, entrepreneur, property owner, or employee, mastering your tax obligations is essential.

Need Help Navigating Taxes in France?

French taxation can feel overwhelming—income tax, VAT, social contributions, corporate tax, property tax… It’s a lot.

If you need guidance with tax registration, declarations, expatriate taxation, business taxes, or optimization strategies, our team can support you at every step.

👉 Contact us today for expert assistance with taxes in France.