income tax in france

Income Tax in France

There is a certain ‘stigma’ about income tax in France. In many surveys and articles France is very often portrayed as one of the highest taxed economies in Europe. Stories are rife about the ‘harsh’ social charge regime particularly for small businesses/micro enterprises.

However, if you are considering a permanent move to France, you may be pleasantly surprised by the realities of the French income tax regime. If you are planning to move to France as a retiree or early retiree it is essential to plan your income stream before you make your move. Make sure you consult a financial adviser that can give you both tax and investment advice in the United Kingdom (if this is your home country) and France. If not consult one in your home country and also one in France.

Europe.properties have long standing relationships with independent financial advisers in the United Kingdom that are also regulated in other EU countries including France. We also have a number of bi-lingual accountancy practises in France that can perform a full range of services from filing annual tax returns through to complex personal and corporate tax advice.

Tax facts :

  1. A pension commencement lump sum equivalent to 25% of your pension fund is free from income tax in the United Kingdom – however if you take this when you are tax resident in France it may be subject to income tax.
  2. If you are married, in France you are taxed as a household and will have two tax free allowances added together before income tax becomes payable. This is useful particularly if one of you has a higher income than the other.
  3. All pensions in payment in France receive an abatement or allowance of 10% before tax is payable.
  4. In France the income tax brackets are 0/14/30/41/45% as opposed to 0/20/40/45% for the UK.
  5. In essence, as an individual in the UK you would pay 40% tax above the £50,001 threshold. However, as an individual in France you wouldn’t reach this height until above €73,779.

So even higher earners can pay less tax…….

In conclusion, do not let income tax scare you of from making a permanent move to France particularly as a retiree. Always plan ahead and make sure you consult professional, regulated advisors.

The allowances and rates are correct at the time of publishing.

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