As you would expect in a country with millions of bureaucrats, the French tax system is inordinately complicated and most French people don’t understand it. However, it’s essential to be aware of which taxes you should pay and when. Before you move to France, take expert advice, preferably from someone with knowledge of the tax systems in France and your home country, so that you can benefit from the advantages of tax planning. Once in France, it’s best to employ an accountant (expert-comptable) to handle your tax matters, especially if you’re self-employed.
Although French income tax isn’t particularly onerous, social security contributions are; the two together can amount to half your income if you’re self-employed or running a business.
The French tax year is the calendar year and tax payments are usually made in arrears. France has no PAYE income tax system and the onus is on the taxpayer (i.e. you) to file a tax return and make payments on time, though it’s possible to set up a direct debit (prélèvement automatique).
The main taxes in France are as follows:
capital gains tax (impôt sur les plus-values) – payable on the sale of a second home under certain circumstances;
income tax (impôts sur le revenu) – payable by all wage earners except those on very low incomes and those with lots of children;
inheritance & gift tax (droits de succession and de donation) – to penalise you for giving to those you love;
property tax (taxe foncière) – payable by all homeowners at widely varying rates across the country (oddly, the lowest rates are in Paris);
residential tax (taxe d’habitation) – payable by whoever is occupying a property on 1st January;
value added tax (taxe sur la valeur ajoutée/IVA) – automatically added to most transactions;
wealth tax (impôt sur la fortune) – payable by … wealthy people.
Excerpted from “Culture Wise France” which can be purchased from Survival Books