French Individual income tax system
The French fiscal system can sometimes be complex, especially when it comes to individual fiscal matters.
This article aims to explain in details the different personal tax brackets.
- Tax brackets: Individual Income Taxes
First of all, to be liable for individual income tax, you must be domiciled in France. Persons domiciled abroad for tax purposes may be liable to income tax in France when they receive income from French sources.
It is important to note that Individual income tax is not calculated only at a single person level but rather at a household level.
The tax is levied by the French government and concerns all income received by the member or members of the tax household (salary, property income, etc.)
The Article 197 of the French General Tax Code indicates the minimum tax threshold and the applicable tax brackets for the 2022 income tax in France.
The 2022 tax bracket for annual Individual Income Tax is as follows:
| Tax brackets | Tax rates |
| Up to €10,225 | 0% |
| From €10,225 to €26,070 | 11% |
| From €26,070 to €74,545 | 30% |
| From €74 545 to €160,336 | 41% |
| More than €160,336 | 45% |
Although these brackets exist, the computation method is not only limited to net taxable income and depends also on the number of shares of the family quotient. This tax quotient depends on the tax household situation, for example if the taxpayer is single or married, if he has children or not etc.
- Tax brackets: Tax on real estate wealth
For the wealthiest individuals, French government put in place the property wealth tax (IFI).
If you do not live in France, only real estate located in France is taken into account, subject to the provisions of any tax treaty between your country of origin and France.
The IFI is an annual tax, and the applicable date for asset valuation and household determination is January 1 of each year.
The taxable assets under the IFI are all real estate and investments in real estate. You are liable for this tax if the net value of your property in France exceeds 1,300,000 euros.
The 2022 tax bracket for annual property wealth tax according to asset value is as follows:
| Asset value | Tax rates |
| Lower to 800 000 € | 0% |
| From 800 000 € to 1 300 000 € | 0.5% |
| From 1 300 000 € to 2 570 000 € | 0.7% |
| From 2 570 000 € to 5 000 000 € | 1% |
| From plus de 5 000 000 € to 10 000 000 € | 1.25% |
| Higher to 10 000 000 € | 1.5% |
Even though the IFI trigger threshold is 1.3 million €, tax liability starts at 800,000 €.
Please note that temporary exemption for new inpatriates is available. They can benefit from an exemption on their real estate located abroad until the end of the 5th year following their installation in France.
The tax return date is usually the end of May of each year.
If you need any help or information about your tax declaration in France, please do not hesitate to contact us.
