France

Individual - Taxes on personal income

Last reviewed - 11 November 2020

Individuals, whether French or foreign nationals, who have their tax domicile in France are generally subject to personal income tax (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 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 tax 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 250,000 euros (EUR) for a single person and EUR 500,000 for a married couple and of 4% for income that exceeds EUR 500,000 for a single person and EUR 1 million for a married couple.

Progressive tax rates - 2020 * PIT
Total compensation Employee social contributions Net taxable compensation Single Married Married + 1 child (c) Married + 2c
35,000 7,351 28,646 1,740 0 0 0
40,000 8,401 32,739 2,845 196 0 0
45,000 9,405 36,884 3,963 791 0 0
50,000 10,396 41,036 5,084 1,389 583 0
55,000 11,387 45,188 6,204 1,985 1,180 374
60,000 12,377 49,340 7,326 2,583 1,777 971
65,000 13,368 53,484 8,447 3,076 2,374 1,568
70,000 14,359 57,635 9,567 3,573 2,933 2,165
75,000 15,349 61,788 10,689 4,694 3,344 2,762
80,000 16,340 65,939 11,809 5,815 4,245 3,200
85,000 17,331 70,091 12,930 6,936 5,366 3,796
90,000 18,322 74,242 14,051 8,057 6,487 4,917
95,000 19,312 78,395 15,173 9,179 7,609 6,039
100,000 20,303 82,546 16,378 10,299 8,729 7,159
105,000 21,294 86,698 17,911 11,420 9,850 8,280
110,000 22,284 90,850 19,443 12,541 10,971 9,401
120,000 24,266 99,153 22,507 14,783 13,213 11,643
150,000 30,210 124,064 31,699 21,509 19,939 18,369
200,000 40,169 165,547 48,606 34,525 32,955 31,385
250,000 50,149 207,017 67,058 51,528 49,958 48,388
300,000 60,129 248,487 85,720 68,531 66,961 65,391

* Note that social contribution rates are the average rates applicable to 2021 remuneration. PIT rates are those applicable to 2020 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 2021 are shown below.

Type of income Social surcharge (%)
Contribution Sociale Généralisée (CSG) Contribution au Remboursement de la Dette Sociale (CRDS) Other levies
Employment income 9.2 0.5 -
Rental income 9.2 0.5 7.5
Dividends 9.2 0.5 7.5
Interest 9.2 0.5 7.5
Capital gains 9.2 0.5 7.5

The persons affiliated to a compulsory social security scheme, other than French, within a country of the European Economic Area (EEA) (European Union, Iceland, Norway, Liechtenstein) or Switzerland are exempt from CSG and CRDS on their investment income. However, these revenues remain subject to a solidarity levy 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 intra group (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).