There are a large number of different taxes in France. We will briefly introduce the most common.
We can classify them into four categories:
- Inheritance taxes,
- Income taxes,
- Local taxes,
- Other taxes.
I – Inheritance taxes
1. Tax on real estate fortune
This tax is payable by any person, residing or not, in France and possessing property with a net value greater than, or equal to, € 1.3 million.
For more information, please see our article entitled: “Tax on Real Estate Fortune”.
2. Gift and inheritance dues
It is a tax levied on the transfer of a patrimony by donation or death.
A tax return must be filed within 6 months of the death. This declaration is in principle made by the notary who settles the succession or who records the real estate transfer in the case of a donation.
The rate of these fees is progressive according to the value of the property transferred and the family relationship of the beneficiary with the donor or the deceased. It is at least 5% and can be up to 60%.
3. Transfer duties in case of sale
This tax must be paid at the time of the change of ownership, it is due on:
- Sales of buildings (taxes between 5 and 6% depending on the location of the building).
- Sales of business funds (the rate varies from 0 to 5% depending on the value of the fund).
- Disposals of certain company shares (rate of 0 to 5%).
- The contributions of movable properties to the capital of a company (rate of 0 to 5% and in some cases fixed fee of € 375 or € 500).
4. Capital gain
There are two main categories of capital gains:
- The added value of individuals who relate to:
- Some movable property (ships, racehorses, works of art).
- Capital gains of companies: All property sold by a professional.
II – Income taxes
1. Personal income tax
Every person residing in France must declare each year before the 15th of May his income collected the previous year and pay a progressive tax (French bands) according to the amount of his income, the “foyer fiscal” and the composition of this household (married or not, number of children etc …).
These are two taxes levied on almost all income of taxpayers; They are intended to finance social security.
The rate of C.S.G. is of:
- Between 6.2 and 9.2% on the income from work,
- 9.9% on the patrimonial income and investment income.
The rate of C.R.D.S. is 0.5% of the total income concerned.
3. Corporation tax
This tax is based on the profits of companies other than those called “transparent”. “Transparent” companies such as partnerships are not taxed; It is the partners who pay the income tax on their share of profits.
For more information on various taxes on income you can consult various articles on our website:
- What tax regime to choose for an Individual Entrepreneur?
- List of Principal Forms for Income Declaration
III – Local taxes
1. Housing tax
This tax is due on the premises assigned to the dwelling, premises liable to the “Contribution Foncière des Entreprises (C.F.E.)” are exempt.
The basis of this tax is the “cadastral rental value”.
Many exemptions are planned.
2. Property tax
All owners of land, real estate or other various built goods must pay this tax.
Its base is in principle fixed at 50% of the cadastral rental value.
There are temporary exemptions for new constructions, or permanent exemptions for the elderly, disabled or of modest conditions.
3. Territorial Economic contribution
One of our articles “Territorial Economic Contribution” deals with this tax in detail. We invite you to consult it.
4. Tourist tax
Each municipality may request a tax for holidaymakers staying on their territory. The amount is fixed per night spent in the municipality.
The company or organization that provides accommodation to tourists levies the tax; It is then transferred to the municipality.
IV – Other taxes
This tax obviously exists in all European countries, but with rates and rules of recovery often different depending on the state.
We have dedicated three articles on our website:
- Principal rules of V.A.T. in France
- Principles of V.A.T. taxation of Services in Europe
- V.A.T. and Intra-community Trade
2. Various taxes
- Payroll tax: It is due by companies not submitted or partially submitted to V.A.T. It is based on the total gross wages paid by the company.
- Tax learning: It is equal to 0.68% of the gross wages paid by a company. It is used to finance the training of apprentices.
- Participation in vocational training: His rate is set between 0.55% and 1% of gross wages according to the workforce of the company. Contributions finances training actions carried out by companies
- Participation in the construction effort: Any company employing at least 20 employees must pay 0.45% of the salary amount for the year. This tax is used for the construction of social housing.
- Tax on passenger vehicles: Companies that use vehicles intended exclusively for the transport of persons (with the exception of passenger transport companies) must pay a tax on these vehicles. Its amount is fixed according to the emission of CO² on the one hand, and of an “air component” on the other hand.
Anyone residing on the French territory is obviously not liable for all taxes mentioned above.
You can of course contact us if you have doubts about your liability for any tax, one of our English speaking certified-accountants will advise you on this.
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