May 2023

blevins franks

By Thomas Marron
06 14 24 61 29
thomas.marron@blevinsfranks.com

INCOME TAX FRANCE
France’s online portal for income tax declarations opened on 13 April. If you were resident in France last year, or earned income from a French source, you now have to complete and submit your annual tax return for income and gains made over 2022.

Money

For those who arrived in France from the UK during last year, you will, in theory, be declaring your income and gains from your date of arrival in France until 31st December 2021.

You are taxed as a ‘household in France, so a married couple is taxed together, for instance.

In France, income tax declarations generally need to be submitted around the end of May/beginning of June, with the dates varying slightly each year. The online portal for 2022 opened in April and the submission dates have been published.

Deadlines dates for online and paper declarations

Everyone should now file their income tax return online, on the government portal www.impots.gouv.fr, unless you have a genuine reason for not being able to do so.

The dates for online declarations vary according to which department you live in:

Departments 01 to 19 and non-residents – Tuesday 25th May
Departments 20-54 – Tuesday 1st June
Departments 55 onwards – Wednesday 8th June

The deadline for non-residents earning French source income is Monday 2nd May.
All income tax returns are now filed online, unless you have a genuine reason for needing to do a paper return. If you do need to complete a paper return, the deadline (for both residents and non-residents) is Thursday 19 May. This is the date your envelope is postmarked, rather than when it is received.



Moreover, for those of you who are submitting your first return, you may not have received the necessary codes to be able to set up your ‘personal space’ on the tax portal.

You can go on the website www.impots.gouv.fr and on the ‘espace particulier’ page to get your login code and your tax number if you don’t have one.

You can also contact your relevant ‘service des impots’ to obtain your tax number. If you cannot make on online declaration, your first return will have to be in paper form.

The deadline for paper returns is earlier than online returns, on Thursday 19th May (for both residents and non-residents). It is the date of the postmark on the envelope which is used to verify whether you have submitted on time! If you submitted an online return last year, you will no longer receive a paper one in the post.

Income tax rates

Income tax is payable on earnings, pensions and rental income, and you are taxed as a household rather than an individual – the parts familiales system, which can prove beneficial.

Taxes are declared in arrears, so your 2023 return needs to report the income you earned last year. The tax rates for 2022income are:

Income

Tax rate

Tax on Band

Cumulative Tax

Up to €10,777

Nil

€10,778 to €27,748

11%

1,866,70

1,866,70

€27,749 to €78,570

30%

15,246.30

17,113.00

€78,571 to €168,994

41%

37,073.43

54,186.43

Over €168,994

45%

TThere is an additional 3% for a single person where income is between €250,000 and €500,000 per part (nothing is due from a family) and 4% for income exceeding €500,000 per part for an individual, reduced to 3% for a family (up to a limit).

Various deductions and tax credits are available, so make sure you are using all the ones you are entitled to.

Tax on investment income – the Prélèvement Forfaitaire Unique (PFU)

Investment income, such as interest, dividends, capital gains and gains from life insurance policies/non-French assurance-vie, is currently taxed at a fixed rate of 30% rather than the scale rates of income tax. This includes both tax and social charges, so it is beneficial for those with higher investment income.

Households in low-income brackets can opt for the progressive income tax rates (plus social charges) so they are not taxed more under this system.

Unless you are a low-income household, you need to declare interest or dividends received from abroad within 15 days of the month end and pay the 30% tax. This is then offset against the tax due on your tax return.

What you need to declare

French tax residents are liable to French income tax on their worldwide income and gains, so you need to declare all income you earn in the UK and anywhere else outside France, whether it is pension, rental or investment income.

You will not, however, pay tax twice on income that is taxable in the UK. Under the terms of the France-UK double taxation treaty, UK government service pension and rental income are only taxable in the UK. However this does not mean that you do not declare it in France – you must include it on your French tax return. You will then receive a credit equal to the French income tax and social charges.

Real estate gains are liable to tax in both countries, but you receive a credit in France for UK tax paid. Gains made on the disposal of capital investments are generally taxed in the country where the seller is resident.

Remember that if you are resident in France you are also obliged to declare all your foreign bank accounts and non-French life insurance policies, even if you do not earn an income and/or they are dormant. This is done when you submit your annual tax return, using a separate form. The penalties for failing to declare accounts were increased in 2018, so don’t forget about any old accounts.

Non-residents of France need to submit a tax return listing all income earned in France (eg, rental income).

Social charges

Social charges are paid on top of income tax, and for 2022 income generally range from 9.1% to 17.2% depending on the type of income.

They are usually calculated based on the income declared in your income tax return and the authorities will send notification of the amount payable in the autumn, along with your income tax assessment.

Property wealth tax return

If the total real estate assets of your household amount to €1.3 million or more, you are liable for France’s annual property ‘wealth tax’ – Impôt sur la fortune immobilière (IFI).

You need to file your IFI declaration at the same time as your income tax return, as part of your online declaration.

Exchange rate

All income and gains must be declared in Euros, even if you received in another currency. When converting your regular Sterling 2022 income (such as pensions) to Euros for your tax return, you can use the exchange rate 1GBP = 1.1732 EUR.

This article is a brief summary covering the basic elements of income tax in France. It is important to seek personalised, professional advice. For questions about completing your tax return, speak to your local tax accountant.

If you have any general questions about taxation in France and how you may be able to lower your tax liabilities, please do not hesitate to contact Blevins Franks. Our advisers are cross-border tax and wealth management specialists with in-depth knowledge of the French tax regime and the compliant tax planning opportunities available here.


This article is a brief summary covering the basic elements of income tax in France. It is important to seek personalised, professional advice. For questions about completing your tax return, speak to a tax accountant. For advice on effective tax planning in France, to lower liabilities on savings, investments and pensions, speak to a cross-border tax and wealth management specialist like Blevins Franks. www.blevinsfranks.com

Any questions? Ask our financial advisers for help.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

To keep in touch with the latest developments in the offshore world, check out the latest news on our website.

Comments


  1. Hello. I cannot comment on the figure used in the Connexion, but I can explain the methodology used by our trusted accounting partners in arriving at the 1.1732 figure quoted in this article. It is simply an average exchange rate over the course of the 2022, based on quoted Banque de France rates. I hope this helps.

  2. The exchange rate figure you quote is nonsense!!
    The highest rate in 2022 was 1.1673 EUR on 03 Dec 2022.
    So how can the average be 1,17 ?

    1. @Brian Watkinson – the exchange rate went above 1.20 in March 2022.

  3. The average rate you are quoting for 2022 income on 2023 return is different to that quoted by The Connexion (1.158)

  4. It would be very useful if you updated the sterling exchange rate to use for the 2022 tax return (that being submitted May 2023) It used to be easy to get but I cannot find the accepted rate anywhere?

    1. I am also having a problem finding the exchange rate to be used for 2022 tax return. Can anyone help?

  5. Hi
    Is the information on here still correct please? As this is the first year the French Tax office have charged me Social Charges on my UK rental income and when queried they have said they can do this now since Brexit?

    1. Hello Angie. Yes, it is correct and up to date to the best of our knowledge.

  6. No where does it tell the rate!!! why?

    1. This is a blog written by one of our advertisers, providing free information to our readers. Maybe give them a call/drop them an email for confirmation of the rates, or any other questions you might have?
      06 14 24 61 29 / thomas.marron@blevinsfranks.com

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