French tax brackets

13 June 2022
Here is a complete sum up of French tax brackets. You are a foreigner and wish to settle in France but the tax system in France seems complex to you? This article will help you to better understand the rules for income tax and taxation on real estate assets.

French tax brackets : Income Taxes

The Income tax is calculated at the level of the “tax household”. Note that a single person may constitute a tax household. 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.). To be liable for income tax, you must be domiciled in France for tax purposes. Persons domiciled abroad for tax purposes may be liable to income tax in France when they receive income from French sources. The Article 197 of the French General Tax Code sets the minimum tax threshold and the applicable tax brackets for the 2022 income tax in France. The 2022 Schedule of Income Tax is as follows:

Tax brackets

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%
Over €160,336 45%
However, the tax calculation method is not simply limited to net taxable income in euros. Here are a few steps to understand the process.

First, divide the net taxable income by the number of shares of the “family quotient”.

First, divide the net taxable income by the number of shares of the “family quotient”. In France to calculate the tax we consider the family situation. Is the taxpayer single, in a civil union, with children, taking care at home of dependent parents? The number of people in the tax household determines the family quotient. A single person, divorced or widowed, counts for a single part in the calculation of the family quotient. For married or “pacsed”(civil union) taxpayers, each member counts for “one share”. The family quotient will then be equal to 2 shares. If the couple have children, the first two dependent children each account for half a share, then a full share per child is counted from the third. Minor children are automatically taken into account ; same for children with a handicap. For children over 18, they can be a part of the family quotient (under conditions) until they’re 25.
Good to know, Temporary exemption “impatriates”: new impatriates benefit from an exemption on their real estate located abroad until the end of the 5th year following their installation in France. Contact us  for more information .

    Sakina Dissa Junior Tax Advisor Cabinet Roche & Cie, Chartered Accountant in Lyon, France. Specialist in non-residents’ real estate taxation.