France

Individuals, whether French or foreign nationals, who have their tax domicile in France are generally subject to PIT on worldwide income unless excluded by a tax treaty. Individuals who are not domiciled in France (non-residents) are subject to tax only on their income arising in France or, in certain cases, on imputed income.

Personal income tax (PIT) rates

Each category of income is combined, and, after deduction of allowances, is taxed at progressive rates. Total income is split according to family status (i.e. 'the more children you have, the less tax you pay’). Under income-splitting rules, total taxable income is divided by the number of shares awarded to the taxpayer: one share for a single person, two shares for a married taxpayer without children, half a share for each of the first two dependent children, and one full share for the third and each subsequent child. Thus, the income of a married taxpayer with three children is split into four.

However, the tax saved from income splitting is limited depending on the net taxable income of the taxed household. Figures vary for married taxpayers and for single and divorced taxpayers with dependent children.

Rates are progressive from 0% to 45%, plus a surtax of 3% on the portion of income that exceeds EUR 250,000 for a single person and EUR 500,000 for a couple subjects to joint taxation and of 4% for income that exceeds EUR 500,000 for a single person and EUR 1 million for a couple subject to joint taxation.

In addition, starting 2025, a differential contribution on high incomes (contribution différentielle sur les hauts revenus [CDHR]) may apply for the French resident whose adjusted taxable income exceeds EUR 250,000 for a single payer or EUR 500,000 for a couple subject to joint taxation. This new contribution should ensure that French tax resident taxpayers with higher incomes are taxed at a minimum of 20% when the sum of personal income tax (PIT) and exceptional contribution on high income remains below this rate.

* Note that social contribution rates are the average rates applicable to 2025 remuneration. PIT rates are those applicable to 2025 annual income.

Social surcharges

Social surcharges are applicable to various kinds of income. The total social surcharges on employment income, rental income, interest, dividends, and capital gains for 2025 are shown below.

Under the 2026 Social Security Financing Law, the French government enacted a 1.4‑point increase in the (Contribution Sociale Généralisée [CSG]) applicable to most investment and capital income. It includes dividends, gains and capital gains on securities, Plan d'Epargne en Actions (PEA) and employee savings plan income, and likely all types of personal retirement savings plan (Plan Épargne Retraite [PER]).

For income subject to a tax and social withholding (e.g. dividends), the increase is effective 1 January 2026. However, for any income not subject to a withholding but only taxed upon reporting in the taxpayer' return, the increase will apply retroactively as from 1 January 2025 (e.g. capital gains).

The CSG rate applicable to capital income rises from 9.2% to 10.6%, resulting in a corresponding increase in total social surtaxes from 17.2% to 18.6%. As a result, the flat tax (prélèvement forfaitaire unique [PFU]) increases from 30% to 31.4%, combining 12.8% income tax and 18.6% social contributions.

Certain categories remain subject to the former 9.2% CSG rate (17.2% total social surtaxes), including: real estate rental income, real estate capital gains, life insurance contracts and capitalisation policies, and home savings‑plans (plan d'épargne logement [PEL] andcompte épargne logement [CEL]) and other protected regulated savings.

The persons affiliated to a compulsory social security scheme, other than French, within a country of the European Economic Area (EEA) (European Union [EU], Iceland, Norway, Liechtenstein) or Switzerland/UK are exempt from CSG and CRDS on their investment income. However, these revenues remain subject to a solidarity level at a rate of 7.5%.

Inbound assignee regime (Article 155 B of the French tax code)

The inbound assignee regime applies to employees assigned to France by their foreign employer or to employees directly recruited abroad by a French company as of 1 January 2008. In both cases, the individuals must not have been French tax resident during five calendar years preceding the year of beginning of their functions in France. In addition, the individuals need to fulfil specific residence/domicile conditions.

Under this regime, individuals assigned to France by their foreign employer can benefit from a French income tax exemption in relation to salary supplements connected with their transfer.

For employees directly recruited abroad, and for employees transferred to France by their foreign employer who have taken up their position as of 16 November 2018, the regime offers the following options:

• exemption of the actual amount of salary supplements received, or
• a flat rate exemption of 30% of the total remuneration.

The regime still provides for a 'floor' of reportable compensation (i.e. the taxable compensation cannot be lower than the taxable remuneration paid for a similar job in the same or a similar company established in France).

It also provides for an exemption for the part of the remuneration related to foreign workdays. However, the total exemption (i.e. on salary supplements, actual or not, and foreign workdays) is limited to 50% of the total remuneration. Alternatively, the individual can elect for an exemption of French tax on the actual salary supplements and the remuneration related to foreign workdays, limited to 20% of the taxable remuneration.

The availability of this inbound regime is limited to eight years from the year of arrival (five years for taxpayers who have taken up a position in France before 6 July 2016). The employee will be able to keep the benefit of the inbound regime even in case of mobility with the company or intragroup (but still within the eight or five maximum years).

This legislation cannot be combined with the regime available to French outbounds.

Since this tax regime is complex, we would recommend that you seek professional advice before claiming the benefits of this provision on your French income tax return.

'Headquarters' tax regime

Certain expatriates who cannot benefit from the above 'inbound regimes' (or for whom a claim under these provisions may not be beneficial) may be able to claim a full exemption in respect to certain 'expatriate' allowances, providing they do not stay in France more than six years as salaried employees and providing they were not regarded as French tax residents in the year preceding their transfer to France. In particular, the reimbursement by the employer of tuition fees for dependent children enrolled in either primary or secondary school may be tax exempt.

Local income taxes

There are no local taxes on personal income in France. However, there are local taxes on housing for individuals occupying or renting housing in France on 1 January of the tax year. See Property taxes in the Other taxes section for more information. Since 2023, this tax does not apply for the main residence.