Moving to or living in France while earning abroad can feel overwhelming. You may worry about what to report, how much you owe, or whether you’ll be taxed twice. We understand that concern. We also know clear steps calm uncertainty.
This guide frames the core income tax implications you face when you earn outside France but live there. We explain how resident and non-resident rules differ and why that matters for what you must declare. We outline what “worldwide income” means and how treaty relief often avoids double charges.
Early organization of documents, accounts, and asset locations reduces stress and speeds up help from your advisor. For practical pointers and examples tied to current filing realities, see this practical guide.
Table of Contents
Key Takeaways
- Resident status in France changes what you report and how you are taxed.
- Worldwide reporting can be eased by treaty relief and careful documentation.
- Organize accounts and records early to speed advisor review.
- This guide covers rates, social charges, gains, and common filing traps.
- When complexity grows, seek professional advice to protect your position.
Who Pays French Income Tax: Residency Rules That Trigger Worldwide Income
Determining whether France is your fiscal home starts with simple facts about where you live and work.
How France decides residency
- Main home: if your principal dwelling is in France, you are likely a resident.
- 183-day rule: spending more than 183 days in the country often creates residency.
- Professional activity or center of economic interest: your job location or where your assets and family ties lie matter.
Resident vs non-resident
If you are a resident france, you generally declare worldwide income. Non-residents normally report only French-source earnings.
Edge cases include split-time professionals, mixed employment and investment flows, and cross-border family situations. Keep clear records: travel logs, leases, employer contracts, and bank statements help resolve disputes.
When a tax treaty matters
A bilateral tax treaty can override domestic residency rules. Tie-breaker tests in treaties decide which country has primary taxing rights.
| Residency Test | What to Check | Common Outcome |
|---|---|---|
| Main home | Lease, deed, where household lives | Often resident |
| 183-day presence | Entry/exit stamps, calendar | Triggers residency |
| Economic interests | Employer, business, bank location | May determine residence |
For practical steps on managing cross-border obligations, see our guide on managing tax implications as an independent.
Understanding income tax implications for Foreign Income in France
We explain what French rules include and how the final figure is built.
What counts as worldwide receipts for residents
As a resident, you report global sources such as salary, self-employment profits, rental receipts, dividends, and interest. All foreign streams are considered unless a treaty carves them out.
How taxable income is constructed
French practice groups amounts by category, then applies specific allowances, deductions, and credits.
- Categorize gross receipts by nature (employment, business, property, capital).
- Apply statutory allowances and allowable expenses to reach net figures.
- Use treaty relief or foreign tax credits to avoid double charges.
| Category | Treatment | Notes |
|---|---|---|
| Employment | Net after social deductions | Reported on annual return |
| Self-employment | Business expenses deducted | Keep ledgers and invoices |
| Rentals | Allowable expenses reduce taxable | Depreciation and maintenance matter |
| Investment returns | Flat or progressive options apply | Social levies may add on top |
Losses, offsets and carryforwards
Losses generally offset other categories and can be carried forward for six years. Some capital losses, however, must be matched to similar gains.
Real estate capital losses are often final and cannot reduce other categories. Timing matters: a big loss in one year can lower future taxable income and affect effective rates in later years.
Keep these records for your return: annual statements, foreign tax certificates, rental ledgers, and brokerage records. For guidance on declaring foreign earnings, see our page on declare your foreign earnings.
French Income Tax Rates and How Your Tax Rate Is Calculated
Seeing how France slices taxable amounts into bands turns an abstract number into actionable planning. Below we set out the 2024 one‑part brackets and the key mechanics you need to forecast liabilities.
Progressive brackets (Finance Bill 2024)
- Up to €11,294 — 0%
- €11,294–€28,797 — 11%
- €28,797–€82,341 — 30%
- €82,341–€177,106 — 41%
- Over €177,106 — 45%
Marginal versus effective rate
Your marginal tax rate is the rate on the last euro earned. Your effective rate is the average across all bands. Both matter: the marginal rate guides decisions about extra pay, while the effective rate shows real cash‑flow impact.
High‑earner surtaxes and the family coefficient
Top earners may face additional surtaxes of about 3%–4% above set thresholds. These surtaxes can push the top portion of french income into a higher overall load.
The family coefficient divides household taxable parts to compute the burden. Adding dependents reduces the effective rate per household and can change whether a surtax applies.
Practical next steps: build a yearly data pack with earnings by category, treaty position, and household status. This simple file helps you and your advisor model how different rates affect net cash and whether deferral, acceleration, or compensation restructuring makes sense.
Social Charges and Social Security Contributions That Affect Net Returns
Understanding how social contributions and social security charges apply is essential when you model net returns. We separate these items so you can see why your take‑home differs from a pure tax estimate.
CSG/CRDS-style levies on capital and property
Most capital and property receipts face CSG/CRDS-style social charges totaling 17.2%. This rate often hits investors immediately at source and reduces gross receipts before any tax credit is applied.
Reduced rate for certain EU/EEA/Swiss‑insured individuals
If you remain covered by a compulsory scheme in the EU/EEA or Switzerland, you may qualify for a reduced social contribution rate of 7.5%. Proof of foreign coverage is essential to claim this relief.
Activity and replacement receipts: regime matters
For wages and replacement receipts, social charges and social security contributions differ by regime. A common social contribution on activity is about 9.7%, but employer withholding and self‑employed rules change the final burden.
- We treat social security as separate from CSG/CRDS so you can model total burden correctly.
- Cross‑border payroll, totalization agreements, and where the work is performed can change obligations.
- Adopt a net‑first planning mindset: forecast net returns after both sets of contributions before deciding.
For detailed calculation examples and scenarios, see our guide to social charges and how they impact planning.
Investment Income and Capital Gains: Dividends, Interest, and Real Estate
Choosing the right treatment for your investment returns matters. You can usually accept the flat levy—known as the PFU—or opt for progressive rates when that lowers your household burden. Make this choice with a full view of other earnings and deductions.
Flat levy vs progressive treatment
The standard route for dividends and interest is a 30% flat levy: 12.8% on the return plus 17.2% social charges. This is simple and often efficient for modest portfolios.
However, you may elect progressive rates if your overall bracket and deductions make that cheaper. Run a comparison before filing—the better option depends on household circumstances.
Capital gains on securities
Gains from shares follow similar rules: they face the flat levy unless you choose progressive treatment. Keep acquisition and sale records to calculate the net capital figure and any allowable costs.
Real estate gains and holding-period relief
Real estate capital gains are taxed at 19% plus 17.2% social charges (36.2% combined). Allowable costs and acquisition fees reduce the taxable gain.
Holding‑period relief begins after year 5. No income levy on gains after 22 years, and social charges drop to nil after 30 years. The principal residence usually benefits from a full exemption.
Surtax on large property gains
For net gains above €50,000, a supplementary surtax applies (2%–6%). Budget for this when selling higher‑value real estate assets to avoid surprises.
Wealth Tax on Real Estate (IFI): When Assets Create an Extra Annual Tax
Real estate held on January 1 sets the IFI position for the year. If your net real estate assets pass the €1.3M threshold after allowable debt, you must declare and may owe IFI. This rule matters for residents and non-residents in different ways.
What counts as taxable real estate
- Direct ownership of property in France and abroad (for residents).
- Certain indirect holdings via companies, pro rata for the real estate fraction.
- Investment portfolios with embedded property exposure where law requires inclusion.
Progressive rates and calculation
The IFI scale ranges from 0.5% up to 1.5% on the net base. Unlike a flat levy, a progressive approach applies bands of net value to rising rates to produce a final charge.
| Net real estate base (€) | Approximate rate | Practical note |
|---|---|---|
| Up to 1,300,000 | 0% | No IFI liability |
| 1,300,001 – 2,570,000 | 0.5% – 0.7% | Entry range; small marginal exposure |
| 2,570,001 – 10,000,000 | 0.7% – 1.0% | Main progressive band |
| Over 10,000,000 | 1.0% – 1.5% | Highest marginal rates apply |
Cross‑border rules and new‑resident relief
French residents are generally liable on property both in France and outside france. Non‑residents normally face IFI only on French real estate, subject to treaty provisions.
Important relief for new arrivals: if you were not tax resident in France in the five years before arrival, assets located outside france may be exempt until December 31 of the fifth year following your move. Timing a relocation and holding structure can therefore affect exposure.
« Valuation discipline and careful debt documentation are the most effective defenses in an IFI review. »
Debt deductibility and valuation
Debt can reduce the net base, but rules are restrictive: only qualifying liabilities linked to the real estate and supported by documentation count. Valuation must be defensible—use market comparables and clear assumptions to avoid disputes.
Practical step: treat IFI planning as part of a broader asset strategy. Review valuations, check deductible loans, and consult early so structuring aligns with your long‑term goals.
Learn more about cross-border considerations
Tax Returns and Reporting Foreign Assets: What to File and When
A clear calendar and an itemized account list make the first French return far less stressful.
When to file: New residents file their first tax return in the year following arrival. Annual electronic filing usually opens in May. Plan documents and figures ahead of that window.
Mandatory declarations
Foreign bank accounts, foreign life insurance policies, and digital asset accounts must be declared using Form 3916. File one form per account or policy and keep records for each year.
| Item | Form | Common timing |
|---|---|---|
| Bank accounts | 3916 (per account) | May annual filing |
| Life insurance policies | 3916 (per policy) | May annual filing |
| Digital asset accounts | 3916 (per wallet/exchange) | May annual filing |
Penalties & payment methods
Non-disclosure fines run €1,500 per account per year, rising to €10,000 in non-cooperative jurisdictions.
Collection: Wages and pensions use withholding. Rental and business receipts are handled via monthly or quarterly installments. Assessments usually follow later in the year.
For a practical checklist to declare your foreign earnings, see declare your foreign earnings.
Buyer’s Guide to Tax Planning Support: Treaties, Expat Regimes, and Choosing Professional Advice
Before you sign an engagement letter, know how a specialist will handle IFI, foreign reporting, and estate assets. A clear scope keeps your plan practical and reduces surprises.
How treaty relief usually works
Most relief flows by either a tax credit or an exemption with progression. A tax credit offsets French liabilities up to the local charge. Exemption with progression removes the foreign amount from the base but still affects the rate applied to other euros.
U.S.–France and broader coverage
The U.S.–France treaty gives Americans routes to avoid double charges at a practical level. France also has treaties with around 125 countries, which helps many cross‑border professionals.
Inpatriate / expatriate regimes
These regimes can exempt assignment‑related compensation and may include a 30% impatriate allowance. Eligibility often requires no French residence in the prior five years, and benefits can run to the end of the eighth calendar year after transfer.
Choosing an advisor and what to bring
- Look for experience with IFI, real estate, Form 3916, and cross‑border estate planning.
- Check clear deliverables, timeline, and fee structure as part of professional advice.
- Bring income summaries, foreign tax certificates, account lists, and prior‑year residency proof to the first meeting.
« Good advice is operational: a clear plan, document checklist, and predictable fees. »
Conclusion
A few clear actions can turn complexity into a manageable annual routine.
Key decision points: confirm residency, define worldwide scope, check treaty position, and classify earnings by category. These steps shape your overall taxation outcome in France.
Understand rates and social levies so you plan for net cash, not just the headline number. Common risks include missing foreign account declarations, misclassifying receipts, and overlooking social charges or wealth exposure.
Next steps: map streams, list accounts and assets, estimate payable amounts, and book advisory support if needed. Remember estate matters early—assets and heirs across borders change choices.
With the right information, tidy records, and good advice, you can stay compliant and make confident long‑term decisions in France.
FAQ
How does France determine tax residency?
France looks at several tests to decide residency: your main home in France, spending more than 183 days there in a calendar year, and where your primary economic interests are located. If any of these apply, you are generally treated as a French tax resident and liable on worldwide income.
What is taxed for residents versus non‑residents?
Residents are taxed on worldwide income (employment, self‑employment, rental, investment, pensions). Non‑residents are taxed only on French‑source revenue, such as French employment, rental income from property in France, or capital gains on French assets.
When do tax treaties override French residency rules?
If a double taxation treaty exists, its tie‑breaker rules can prevail when two countries claim residency. Treaties typically consider permanent home, centre of vital interests, habitual abode, and nationality to determine which state has taxing rights.
What does “worldwide income” include for French residents?
It covers salary, freelance and business profits, rental income, dividends, interest, pensions, capital gains and certain benefits in kind. Some categories may benefit from special allowances, exemptions or treaty relief depending on source and nature.
How is taxable income calculated in France?
Taxable income is built from defined categories (earned income, property income, investment income) after applying specific abatements, deductible expenses and social contributions. Double taxation relief can reduce the taxable base when treaties apply.
When can losses offset other income?
Business and property losses can generally be set against same‑category profits and, subject to limits, carried forward. Specific rules limit offsetting between categories and cap certain deductions, so timing and classification matter.
What are the current progressive tax brackets?
France uses a progressive scale applied to taxable household income after the family quotient. Bracket thresholds are updated annually in the finance law; the effective rate depends on aggregated household income and number of family parts.
Are there surtaxes for very high incomes?
Yes. High earners may face surtaxes or contribution surcharges at the top of the scale, which increases the marginal burden above standard bracket rates for very large taxable amounts.
How does the family coefficient affect my rate?
The family quotient divides taxable income by household parts (marital status and dependents), then multiplies the tax back. This reduces progressive pressure for families; household composition therefore directly impacts the effective rate.
What are the social contributions on capital and property income?
Most capital and property income face social charges similar to CSG/CRDS, commonly totalling around 17.2%. These contributions apply in addition to income tax and affect net returns on investments and rent.
Are reduced social contribution rates available?
Certain individuals insured under an EU/EEA/Swiss social system may benefit from reduced rates (for example, a 7.5% scenario for some categories). Eligibility depends on social‑security affiliation and bilateral rules.
How do social charges apply to salaries and replacement income?
Employment and replacement incomes (pensions, unemployment) are subject to social security contributions under the relevant regime. Contribution levels and caps differ by regime and can change with status (employee, self‑employed).
What is the flat tax on investment income?
The prélèvement forfaitaire unique (PFU) is a flat levy commonly described as 30% in total: 12.8% income component plus roughly 17.2% social charges. Taxpayers can opt instead for progressive taxation if that yields a lower charge.
When should I elect progressive rates over the flat levy?
You can choose progressive taxation when your household bracket and deductions make the progressive approach cheaper. The best option depends on your total taxable base, available allowances and personal situation.
How are real estate capital gains taxed?
Gains on French property are generally taxed at 19% plus social charges (about 17.2%), giving a combined rate near 36.2%. Relief applies for long holding periods, the principal residence is often exempt, and a surtax can apply for large gains.
What holding‑period relief and exemptions exist for property gains?
France grants taper relief for both the income and social charge components as ownership duration increases; full exemption for the main residence commonly applies. Additionally, high gains above thresholds may trigger an additional surtax.
When does net real estate trigger the IFI (wealth tax)?
The Impôt sur la Fortune Immobilière applies if your net real estate assets exceed €1.3 million. It targets real property holdings worldwide for residents, with valuation rules and deductible debts taken into account.
What are IFI rates and how do they work?
IFI uses a progressive scale with marginal rates from 0.5% up to 1.5% depending on the taxable net value above thresholds. Tax planning on valuation, debt allocation and ownership structure can materially change the outcome.
Are there exemptions for new residents’ non‑French assets under IFI?
New residents may benefit from specific measures or treaty relief for assets located outside France, subject to conditions. These transitional rules require careful analysis of timing, asset location and applicable treaties.
Can debts be deducted for IFI purposes?
Deductible liabilities related to real estate—such as mortgages on the taxed property—generally reduce the net IFI base. Documentation and correct allocation of cross‑border debts are essential to secure deductions.
When must new residents file their first French return?
New residents typically file a tax return for the year they become resident. Annual filing follows the national schedule, with online declarations usually due in May for most taxpayers; exact deadlines vary by department and filing method.
What foreign assets must I declare to French authorities?
You must disclose foreign bank and brokerage accounts, life insurance contracts held abroad, and certain digital asset accounts (Form 3916 and related declarations). Detailed reporting helps avoid penalties and supports correct levy application.
What penalties apply for failing to declare foreign accounts?
Penalties can be substantial: fines per undisclosed account and additional fees based on the length of non‑reporting. Criminal sanctions may apply in severe cases. Voluntary disclosure programs can mitigate penalties in some situations.
How do withholding and instalments work for different revenue types?
Salaries are often taxed at source, whereas rental and business revenue rely on quarterly instalments or annual assessments. Withholding for certain investment income may be applied at source, with reconciliations on the annual return.
How do treaties provide double taxation relief?
Treaties typically allow either exemption with progression or a foreign tax credit to avoid double taxation. The treaty text and domestic implementation determine whether income is exempt, credited, or subject to limited French tax.
What should Americans note about the U.S.–France treaty?
The U.S.–France treaty contains rules on residency, pensions, business profits and relief methods. Americans must also consider U.S. reporting (FBAR, FATCA) and the interaction between French withholding and U.S. credits.
What are the impatriate and expatriate regimes?
Special regimes exist to attract inbound workers (impatriates) or relieve departing residents. They offer partial exemptions for certain wages, bonuses or investment income for limited periods, subject to eligibility and time limits.
How do I choose a French advisor for cross‑border needs?
Look for advisors with cross‑border experience, credentials (expertise in IFI, real estate, treaties, reporting), and client references. Confirm multilingual capacity, coordination with foreign counsel and clarity on fees and deliverables.
What documents should I gather before meeting an advisor?
Prepare identification, previous tax returns, proof of residency, details of worldwide income and assets, bank statements, life insurance and investment contracts, property deeds, and any treaty‑relevant documentation.
