Taxes in France in 2025

Managing taxes is one of the major challenges foreigners moving to live and work in France face. To avoid legal complications, it is important to understand how the local system works. This article is designed to help you with that.

Earlier, we described tax regulations in Poland and Germany in detail.

Note: This article provides general information about the French tax system and should not be considered professional legal advice. For specific situations, it is recommended to consult a qualified specialist.

At the legislative level, taxation in France is overseen by the Ministry of Economy and Finance. The tax year follows the calendar year: from January 1 to December 31. French residents are required to pay a number of national and regional taxes, including:

France also applies an indirect tax — VAT (TVA) — charged on most goods and services. The standard rate is 20%, while reduced rates apply to certain categories:

In 2019, France introduced a “pay-as-you-earn” (PAYE) system. Previously, income tax had to be paid in a lump sum at the end of the year. Now, payments can be spread out: taxpayers can divide the yearly amount into 12 monthly installments.

Additionally, with an agreement from the employer, income tax can be withheld directly from the salary, making the process simpler and more predictable.

Several important updates affecting individuals were introduced into French tax legislation in 2025:

1. The income tax (IRPF) brackets were raised by 1.8%. Income tax now applies to annual earnings starting from €11,497. The threshold for the highest 45% rate has also increased — to €180,294 per year.

2. A new contribution for high-income earners (CDHR) was introduced. This applies to individuals earning more than €250,000 or couples with a combined income above €500,000. If a taxpayer’s total income tax paid amounts to less than 20% of their income, the difference must be paid as CDHR. This primarily affects people whose main income comes from capital, which in 2025 is taxed at 12.8%.

3. The tax on financial transactions increased from 0.3% to 0.4%. This applies to purchases of shares in companies listed on the French stock exchange.

4. The tax on monetary gifts to children and grandchildren for home purchases or renovation has been abolished. No tax is due if the gift amount does not exceed €100,000 per donor per child or €300,000 per beneficiary.

A person is considered a tax resident of France if they meet at least one of the following three criteria:

As a tax resident, a person must pay taxes on all worldwide income, regardless of their citizenship. Non-residents are taxed only on income sourced in France. For example, if someone lives in another country but works for a French company, they must pay French income tax.

Moving to France does not automatically free an expat from tax obligations in their home country. Once a person becomes a French tax resident, they may fall under the rules of double taxation — when two countries can claim tax on the same income.

To avoid this, it is essential to check whether a double tax treaty exists between France and your country. You can find the full list on the official tax website: www.impots.gouv.fr → International → A savoir.

Two situations are possible:

There are two main mechanisms: a tax credit equal to the foreign tax paid; or a tax credit equal to the French tax that would apply to foreign income. In both cases, the taxpayer has the right to a relief to avoid paying twice.

If you find it difficult to understand double taxation rules on your own, it is best to consult a tax specialist. The cost of professional advice is small compared to potential problems with local authorities.

France uses a progressive income tax system with rates ranging from 11% to 45%. The exact amount depends on whether the taxpayer is married, has children, and qualifies for applicable deductions and benefits. Income below €11,497 per year must still be declared, but it is taxed at 0%, so no payments are required.

If a household consists of a married couple, income tax can be calculated jointly, using the so-called family quotient (le quotient familial). When children appear in the family, the number of parts (parts fiscales) increases, which reduces the tax burden.

Here is how it works:

How the calculation works:

The household’s total taxable income is divided by the corresponding number of parts. The tax rate is applied to this amount. The resulting tax is then multiplied back by the number of parts — this final figure is the amount due. A family can receive up to €1,794 in deductions per child.

The minimum taxable rate applies to annual incomes above €11,497. The maximum rate of 45% applies only to incomes over €180,294 per year.

Individuals earning more than €250,000 per year (€500,000 for couples) must additionally pay 3–4% as part of the Contribution exceptionnelle sur les hauts revenus — the exceptional tax on high incomes.

Savings, investments, and bank interest are taxed at a flat rate of 30%.

For non-residents, income earned in France up to €29,315 per year is taxed at a flat rate of 20%. Amounts above this threshold are taxed at 30%.

A general 10% deduction from employment income is available ([up to a maximum of €14,455]). (https://www.europeaccountants.com/france/tax#ourcharges_4).

Self-employed individuals — freelancers and sole proprietors — pay income tax at the same progressive rates as salaried employees. The progressive tax system applies to anyone engaged in professional activity.

In some cases, special regimes are available to reduce the tax burden, such as the micro-entrepreneur (self-employed) regime, which simplifies accounting and lowers contributions.

In addition to income tax, self-employed individuals must pay several other mandatory charges:

Failure to pay contributions on time can result in a penalty of up to 10% of total revenue.

Companies operating in France must pay corporate income tax at a flat rate of 25%, regardless of profit size. Small companies may benefit from a reduced 15% rate on their first €38,120 of annual profit. Corporate tax is paid quarterly.

From the salaries of French residents, the employer pays monthly social contributions to the state ranging from 3.8% to 8.3% (CSG). Bonuses and benefits in kind are included in the calculation, even if they are received from abroad.

The funds collected through these social contributions are used to finance health insurance, pensions, unemployment benefits, and other social support programs.

Under the Impôt sur la Fortune Immobilière (IFI), individuals with significant net assets may be subject to taxation. These assets include real estate, vehicles, valuable goods, money in bank accounts, receivables, or financial obligations owed to companies.

This tax applies to property owners whose total real estate assets exceed €1,300,000, regardless of whether they live in the property or not. It is often referred to as a luxury tax. The calculation is based on the property’s rental value and local regulations. Depending on the total value of the real estate assets, the base tax rate ranges from 0.5% to 1.5%.

Tax residents must pay this tax on all their real estate, both in France and abroad. Non-residents pay it only on property located in France, if they meet the criteria.

If a person has recently moved to France and was not a tax resident during the previous five years, they are exempt from paying IFI on foreign property for their first five years in the country.

There is also a discount on property owned for more than five years — from 6% to 100%, with the tax decreasing the longer the owner has held the property.

Additionally, the IFI rate can be capped if the total amount of all taxes exceeds 75% of last year’s income.

Previously, this tax applied to anyone living in a property, regardless of ownership.

Since 2023, it has been abolished for primary residences.

Starting from 2023, it is paid annually by owners or tenants only if the property is considered a secondary residence or an unused dwelling.

For example:

This tax is levied on the estate of the deceased or the giver and must be paid by the heirs or recipients. The amount depends on several factors:

The rate ranges from 5% on assets valued at €8,072 inherited by children, grandchildren, or parents, to a fixed 60% for beneficiaries with no family relationship. Typically, spouses are exempt from inheritance tax.

Typically, the annual tax return using CERFA form No. 2042 (or CERFA No. 2042-NR for those who arrived in France during the current calendar year) is submitted in May or June, with exact deadlines depending on the region of residence. The declaration can be submitted on paper or online through the official website of the French tax administration.

What must be declared?

The filing system is relatively automated. Upon logging into impots.gouv.fr, a person may find that the CERFA form has already been pre-filled with data collected by the French tax authorities from various sources. If the information is correct, it can be confirmed with one click. If not, the taxpayer must make the necessary corrections.

Before submitting the declaration, make sure you have a French tax identification number (numéro d’identification fiscale, NIF). Without it, using the official portal may be more complicated.

A tax resident may choose to pay income tax in a single payment or divide it into equal installments throughout the year.

Many expats who need to navigate the specifics of the French tax system come to the country for work. Often, the money they earn is used not only for their own needs and comfort but also to support family members who remain abroad.

To send money from one country to another, there are many available tools — one of them is the Korona app. It offers fast transfers to 60+ countries, which can be arranged quickly and easily. One of the lowest exchange markups on the market ensures that Korona users do not overpay for convenience and speed.

The app is available for download in the App Store and Google Play.

In our blog, we write extensively about life and work in European countries. If you found this article useful, you may also enjoy exploring other materials in our catalog.