Taxation en France

The French system of taxation is determined by the French Parliament each year and characterised by its high complexity.

There are four categories of taxes in France

· taxes on income;

· taxes on expenditure;

· taxes on assets;

· local taxes.

As concerns the main taxes, France is similar to other European Countries.

However there are some peculiar elements.

Taxes on income

Corporation tax is a tax, in principle payable annually, on all profits generated in France by

companies and other legal entities. It concerns about a third of French companies. Legal entities may

be liable to corporation tax:

either at the standard rate of 33⅓% for all their activities;

or at the reduced rates.

In addition, some corporation tax payers are liable to a social contribution.

 

Personal income tax is a tax levied on an individual's total yearly income. Usually, all income, regardless of origin, is aggregated to give an overall net income to which a single tax scale is applied. The scale has progressive income bands.

Personal income tax is assessed on the basis of the "tax household", i.e. the family entity consisting

of a single person, two partners who have concluded a civil solidarity pact or spouses, whatever their

marital property regime, and their children or other dependents.

 

Regardless of their nationality, persons not domiciled in France are taxable in France on their income from French sources only.

The authorities calculate personal income tax on the basis of the amounts declared by taxpayers,

who are required to submit a single return per tax household reporting all income received in the

previous year.

 

Taxes on expenditure

Taxes on expenditure are levied on household and business consumption and investment.

Taxes on expenditure traditionally took the form of indirect consumption duties, circulation duties and

customs duties.

VAT is a general consumption tax levied on all goods supplied and services provided in France.

Liability to VAT is determined by the type of the transactions or products concerned, regardless of the

personal situation of the liable person or customer.

VAT is calculated by applying a proportional rate to the base amount of the transaction (free of VAT),

whatever that amount may be.

There are also numerous sets of special rules that take into account the particular conditions for the

exercise of certain activities, such as banking and financial services, investment gold transactions and

travel agencies.

 

Taxes on assets

Assets may be taxed when transferred for valuable consideration (sale) or without valuable

consideration (gift, inheritance). In these cases, the tax generally takes the form of registration duty.

Assets may also be taxed by the fact of their ownership. In that case they are liable to an annual tax

on their total value, in the form of wealth tax and property tax, the latter being assessed on real

property only.

Assets may also be liable to capital gains tax on disposal.

 

Local taxes

Local direct taxes are the oldest taxes in the French tax system.

Local taxes are collected by the State on behalf of local authorities (regions, départements,

communes) and public establishments for intercommunal cooperation.

There are four main local taxes – property tax on developed land, property tax on undeveloped land,

residence tax and the local economic contribution as well as some additional or similar taxes.

 

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Impôts et taxes en France

Les entreprises sont soumises, principalement, à trois grands types d'imposition : l'imposition de ses bénéfices, la contribution économique territoriale (CET), la TVA.