Obligations regarding tax returns
You are an individual and need some help with the filing of your tax returns.
You are an individual residing abroad and you need to declare income generated in France.
Taxation in France
Income tax is a tax payable by natural persons which is based on the overall net income received by the taxpayer in a year.
The tax is established each year in May/June by means of an annual tax return (form no. 2042) and its attachments.
Taxation is set per taxable household. This means that every taxable household consisting of a married couple or a couple bound by a civic solidarity pact and their children if minors or dependent adults, must submit one single return comprising the household’s entire income. The tax is calculated according to the number of dependent persons in the household (family quotient).
Who has to submit a tax return?
Those required to submit an annual tax return are:
1. Tax residents in France: these are people whose household or principal place of abode is located in France, who carry out professional work in France or whose centre of economic interest is in France. Taxpayers resident in France for tax purposes must declare all their worldwide revenues in France. If foreign income is received, it will be necessary to report this income in the French tax return and to register there the methods of eliminating double taxation depending on the relevant tax treaty.
2. Non-residents: These are people whose tax residence is not in France but who are potentially liable for tax because they receive income from a French source.
Non-residents are only liable for tax in France on the income they receive in France.
What income and expenses should be included in the income tax return?
All income and expenses should be included in the income tax return by category: earned and replacement income, financial income, land income, capital gains etc.
According to the category or the place of collection, it may be necessary to submit attachments to the return (form nos.: 2047, 2042 C, 2044, etc.).
The total income thus declared forms the overall net income which is subject to the progressive scale depending on the household allowance.
The progressive scale for 2018 is as follows:
Amount of taxable income Tax rate
Under €9,964 0%
From €9,964 to €27,519 14%
From €27,519 to €73,779 30%
From €73,779 to €156,244 41%
Over €156,244 45%
Certain expenses may be eligible for a tax credit or a reduction and can be deducted from tax. These amounts should also be included in the income tax return.
It is also compulsory to declare accounts held abroad on the form no. 3916 or financial penalties may ensue.
The return must be submitted to the local personal tax office serving the taxpayer’s place of residence. For non-residents, the tax return must be sent to the tax office responsible for non-residents.
Following the income tax return in May/June, a tax assessment is sent in August/September taking into account advance payments already made throughout the year (withholding tax).
In case of property exceeding €1,300,000, the taxpayer is also required to submit a return for wealth tax on real estate assets together with the income tax return (threshold applicable for taxation in 2018, for assets as on 1 January 2019).
Altexis offers you support in respect of your obligations regarding tax returns in France:
- If you are a tax resident, we can help you file your income tax return.
- If you are a non-resident for tax purposes, we can help you file your income tax return.