French Income Tax
Our tax guide for freelance contractors working in France
Individuals who have their home or principal abode in France, or who perform employment or independent services (unless these are only ancillary), or who have their centre of economic interests in France, are considered resident for tax purposes, and are required to pay tax on their worldwide income. Individuals not fulfilling any of these conditions are generally treated as non-resident taxpayers and are taxable in France only on their French source income (mainly income deriving from work performed in France).
In France, income tax is imposed on the household rather than on each of the spouses separately and, in fact, separate assessment is made in exceptional cases only. Unmarried individuals who live together and have concluded a partner contract (known as a PACS) are generally treated in the same manner as spouses for income tax purposes. There is no definition of taxable income, but it generally encompasses employment income, business income, benefits in kind, investment income, certain types of capital gains, income from immovable property, etc.
Basic income tax applicable to residents is progressive and varies from 0% on up to EUR 5’687 to 40% on income over EUR 67’546 for 2008 assessment on 2007 income. There is a system of coefficients according to marital status and number of children which mitigates the levels of income tax, as can various allowances, tax deductions and other reductions. In addition to income tax, homeowners and/or residents may also be subject to dwelling and/or property tax and wealth tax.