Income tax in France: percentage rate in 2024

Calculation of income tax in France

The calculation of household tax is done in this way:

1. The total income of all family members is summed up.
2. The amount is divided by the number of household members.
3. From the resulting equal shares, the percentage of each is calculated at a progressive rate.
4. The totals are summarized to obtain a tax number.

Example 1

We will calculate the income tax required for a person living in France independently with a net income of 32,000 euros per year.

This person has a coefficient of 1, since he lives independently of other persons, respectively 32,000 / 1 = 32,000 euros — the amount that is the tax base.

• Income up to 11,294 euros is taxed at a rate of 0% = 0 euros;
• Income ranging from 11,295 euros to 28,797 euros is taxed at a rate of 11%: that is (28 797 — 11 294 ) x 11% = 1925.33 euros;
• Income from 28,798 euros to 32,000 euros is taxed at a rate of 30%: that is (32 000 — 28 797 ) x 30% =960.9 euros.

Next, you need to summarize the overall result: 0 + 1925,33 + 960,9 = 2886.23 euros. The final amount must be multiplied by the number of people in the household (in this case by 1): 2886.23 euros x 1 = 2886.23 euros is the amount of income tax required to be paid by this person for 1 year.

Example 2

Let’s calculate the income tax required to be paid to a married couple or a couple who have concluded PACS with two minor children with a net income of 55,950 euros for the whole family.

This household consists of two parents and two children. The total family coefficient is 3. The entire net income of the family is divided by 3: 55,950 / 3 = 18,650 euros — the tax base.

• Income up to 11,294 euros is taxed at a rate of 0% = 0 euros;
• Income ranging from 11,295 to 18,650 euros is taxed at a rate of 11%: that is (18 650 — 11 294 ) x 11% = 809.16 euros.

Next, the final amount must be multiplied by the family coefficient: 809.16 euros x 3 = 2427.48 euros.

In addition, in the French tax system there is a tax benefit for modest incomes (if the amount paid per year does not exceed 3,191 euros for a married couple subject to general tax, and 1,929 euros for single, divorced, widowers). To find out the amount, you must deduct from the lump sum (873 euros for one person or 1444 euros for a couple) your tax, to which the rate of 45.25% applies.

In our second example, the amount of income tax is below the threshold of 3191 euros, the family benefits frombenefits, the amount of which is obtained by the following calculation: 1444 — (2427,48×45,25%) = 1444 — 1098 = 346 euros.

Thus, the amount of income tax after applying the discount is: 2427.48 — 346 = 2081.48 euros.

Non-taxable expenses

A number of expenses are not taxable and are not the basis for calculating taxes:

• the costs of marriage or divorce proceedings;
• child support;
• maintenance of parents (including in a nursing home);
• tuition fees for children at school;
• employment of a nanny for child care;
• donations to political organizations;
• donations to other organizations;
• contributions to the union;
• retirement savings;
• expenses for housing equipment for people with disabilities;
• the cost of installing electric vehicle charging systems;
• real estate investments under Pinel’s law;
• the costs of renting housing in certain municipalities of France.

In all of the above cases, the benefit amount is calculated according to an individual formula.

Income tax for non-residents of France

A person becomes a resident if he stays in France for more than 183 days a year, while losing the residency of another country. For the French tax service, obtaining residency means that the center of an individual’s economic interests is this country of residence.

If you are a non-resident but own property in France, you will have to pay taxes related to real estate, as well as income tax on profits earned in France.

In the absence of residency and real estate in France, you need to pay tax only if you receive income with the appropriate permission to receive it in the country.

As a non-tax resident of France, you are taxed on a progressive tax scale with the following minimum tax rate:

• 20% on your income, which is less than or equal to 28,797 euros;
• 30% on your income over 28,797 euros.

The taxable basis for calculating income tax for non-residents may be: income from business, accrual of pensions or other social benefits, dividends from securities.

Penalties for non-payment of income tax

Despite the fact that the French tax system is characterized by conservatism in general parameters, every year the government attempts to improve the tax apparatus: there is a case (in 2013-2014) when the government approved an income tax of 75% for those whose annual income exceeded 1 million euros.

Late filing of a declaration and non-payment of taxes on all existing sources of income in France is fraught with a system of fines and penalties. The delay in filing the declaration is equal to an increase of 0.75% to the amount of the principal payment every month, this amount increases to 9% per year, and if intentional concealment of part of the income is detected, the fine will reach 40-80% of the increase in the principal amount. Particularly large violations are fraught with the seizure of property, a fine of up to 250,000 euros and imprisonment for up to 5 years. To optimize payments and control delays, many banks directly debit the required amount from your bank account at the time of payment.

Tranio’s legal team is ready to analyze your case and find the best solution for a non-standard situation.

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