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Calculate your take home pay in France (that's your salary after tax), with the France Salary Calculator. A quick and efficient way to compare salaries in France, review income tax deductions for income in France and estimate your tax returns for your Salary in France. The France Tax Calculator is a diverse tool and we may refer to it as the France wage calculator, salary calculator or France salary after tax calculator, it is however the same calculator, there are simply so many features and uses of the tool (France income tax calculator, there is another!) that we refer to the calculator functionally rather than by a specific name, we mention this here to avoid any confusion.
France, Officially the French republic, has a highly developed economy that is the 7th largest in the world, and 3rd largest in the European Union after Germany and The United Kingdom. The official language of France is French and the official currency is the Euro (EUR).
France is a founding member of the European Union and a member of Economic co-operation and Development (OECD), and the World Trade Organization (WTO). It has signed tax treaties with 125 jurisdictions and signed the OECD MLI (Multilateral Convention to Implement Tax Treaty).
The Directorate General of Public Finance (DGFiP) is the revenue service in France. The tax agency is responsible for tax and customs in the country. The DGFiP runs its tax operations through the tax administration website.
Let's discuss the details of various taxes that are levied on individual and corporate income in France.
France has a Pay As You Earn (PAYE) system, under which tax is withheld at source by the employer from the employee's remuneration, including pensions and other income deductions (e.g. Unemployment benefits).
The Tax year for Individuals is the same as the calendar year: 1st January to 31st December.
Married couples and partners of PACS must file joint returns. Separate filing is only allowed for the first year of union otherwise it is not permitted at all.
Despite income tax deductions at source via PAYE, individuals in France are still liable for filing tax returns. Irrespective of the income bracket, all individuals must opt for E filing if they have access to the internet at their main home. Breaches are fined and other penalties are applied for any failure to comply with tax regulations.
A special social security surcharges for French residents of a maximum of 17.2% is applicable on all various kinds of income defined above.
Capital gains from the disposal of immovable assets are taxed at a flat rate of 19% plus a social security charge. The disposal of moveable assets such as stocks and bonds are taxed at 12.8% on income plus 17.2% social contribution which effectively makes the capital gains rate 30%.
There is no capital duty tax or capital acquisition tax in France, also stamp duty is charged at a nominal rate.
Salaries and related benefits are taxed after deducting social security contributions and qualifying professional expenses.
Personal expenses such as child support and alimony or support payment made to parents, grandparents and children above 18 or married children may qualify as deductible expenses. The qualification criterion for deduction is that the beneficiaries of these payments are in need of the funds and the needs can be demonstrated.
Resident and non-resident companies are subject to tax on their French-source income only. Foreign source income of French residents is generally not taxable. Non-resident companies are taxed on real estate income as well that is derived from a French source.
The tax year is generally aligned with the calendar year, a different tax year may be requested that can be shorter than 12 months in special cases.
Corporate taxes are to be filed within 3 months following the end of the tax year for non calendar financial years and by 30 April of the following year for all others.
Consolidated returns are permissible upon meeting the defined criteria. Penalties of 10% are applicable for late payments, also, interest and penalties are payable for late filing and failure to comply with the tax law.
The standard corporate income tax rate is 31% with a reduced rate of 28% applied to the first EUR 500,000 of taxable income. The standard rate of 31% plus 3.3% surtax (effective rate of 32.02) is applied to companies with turnover below EUR 250 million. 33.33% plus 3.3% surtax (effective 34.43%) the CIT is levied on companies with turnover above EUR 250 million.
The tax rates are expected to be progressively reduced by 2022. Small or new business may benefit from lower rates provided certain conditions are satisfied.
Dividends and capital gains may be exempt from corporate tax, given they meet all the requirements.
A tax credit of 30% is offered in France on the qualifying research and development (R&D) Credit under the tax incentive regime. The expenses are limited up to 100 million or 5% above this limit, given all the conditions are met.
A patent box regime may be applied on or after the financial years commencing after 1 January 2019, under which income and capital gains derived from patents are taxed at the reduced rate of 10%.
Net operating losses may be carried forward indefinitely, however, carry back of losses is permitted for one year only, provided certain conditions are met.
Interest paid by a French company to a nonresident lender is generally not subject to withholding tax.
Note: Withholding taxes, in line with the reduction in standard corporate tax, are expected to be reduced by the year 2022.
Real property tax and CET- Resident and non-resident companies operating in France must pay the CET (Contribution Economique Territoriale). This has two components: A real property tax and tax calculated on adjusted gross revenue of French business.
Transfer of shares is subject to a registration duty of 0.1% with no cap.
VAT is generally applied on imports, and supply of goods and services performed in French VAT territory. You can calculate VAT in France using the France VAT Calculator.