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Taxes in France – everything you need to know before moving

It is not uncommon to say that one of the two inevitable things in life, right next to death, is taxes. We also need to prepare for them before moving to France. However, we must prepare for the fact that it has completely different tax laws, so before moving in, read carefully all taxes that we would have to pay as residents of France. 

Types of taxes in France

Personal taxes in France are divided into three main types: 

  • income tax (impôt sur le revenu) 
  • tax on goods and services (taxe sur la valeur ajoutée, TVA, VAT) 
  • social insurance contributions (charges sociales/cotisations sociales) 

In certain life situations, there are also occupation taxes (taxe d’habitation) and property taxes (taxe foncière). These are the main taxes the average French citizen should worry about paying. 

How many percent of the tax does the average French pay?

Let’s start with income tax. In France, specific tax percentages are quite clearly defined for a specific amount of money paid out. For 2021, they are as follows: 

  • Less than €10,084: 0% 
  • €10,085 — €25,710: 11% 
  • €25,711 — €73,516: 30% 
  • €73,517 — €158,222: 41% 
  • Over €158,223: 45% 

Taking into consideration that the average annual salary in France for 2021 is around €39,346, the average French pays income tax of 30% of his salary, which is around €11,803 for the amount quoted.

Meanwhile, the French health insurance contribution is 0.75% of the worker’s wage. It is part of the contribution paid by the employee, the total amount is 13.55%, of which 12.8% is paid by the employer. With the average contribution quoted, the contribution is therefore €295.

VAT taxes, on the other hand, differ depending on the product or service purchased by us, but they are determined in advance for a given type of product. So, VAT in France is:

  • 2.1% (reimbursed drugs, sale of live animals for slaughter, certain cultural events, certain press publications)
  • 5.5% (electricity, books, food, gas) 
  • 10% (firewood, passenger transport, renovations, social housing, unprocessed agricultural products) 
  • 20% (normal, not lowered rate)

What taxes do foreigners have to pay in France?

Non-French citizens usually pay income tax of 20% on income up to €27,519 and 30% above this amount. However, this income must come from a French source. They also include all VAT and health insurance contributions, if employed.