Taxation in France

The different tax rules in France

Social Contributions "Les cotisations sociales"

Social contributions are contributions paid by employers and employees which is then redistributed by the French social protection system to the French citizen.
It differs from tax in a sense that social contributions has a counterpart on the standard of living of all taxpayers.

Income Tax "Impôt sur le revenu"

It is a direct tax that relates to the income perceived by individuals, businesses, or other similar entities.
There is a distinction between the income tax relating to French people and the income tax relating to businesses which is called "impôt sur les sociétés" equivalent of corporate tax.

TVA (taxe sur la valeur ajoutée), équivalent to VAT

The standard rate of VAT (value added tax) in France is set at 20%. it concerns the majority of sales of goods and services.

The reduced rate of 10% concerns unprocessed agricultural products, firewood and the housing improvement works that do not benefit from the 5.5% rate, certain accommodation and camping services, fairs and shows, fairground games and rides, entrance fees to museums, zoo, monuments, passenger transport, waste treatment, catering.

The reduced rate of 5.5% concerns most food products, feminine hygiene protection products, equipment and services for the disabled, books on any medium, gas and electricity subscriptions, supply of heat from renewable energies, supply of meals in school canteens.

The particular rate of 2.1% concerns drugs reimbursable by social security, sales of live animals for slaughter and delicatessen to non-taxable persons, television license fees, certain shows and press publications registered with the Commission joint publications and press agencies.

Property wealth tax "Impôt sur la fortune immobilière" (IFI)

The property wealth tax "impôt sur la fortune immobilière" is a tax paid by persons who hold property assets not allocated to professional activity and strictly above 1,300,000 euros of net taxable property assets.
The rates of the IFI scale range from 0.5 to 1.5% base on the value of the property.
The first range of tax begin when the value of the property reach 1,300,000 euros.

The general social contribution (CSG contribution sociale généralisée).

In France, the general social contribution (CSG) is a tax which contributes to finance the social security and the unemployment insurance. These tax is deduce on all taxpayer income and its rate is 9.20%.

TICPE (Taxe intérieure de consommation sur les produits énergétiques) Internal consumption tax on energy products

The TICPE (Internal consumption tax on energy products) is a tax which is paid on petroleum products when they are intended to be used as fuel or heating fuel.
This tax is calculated regarding the proportion of the product ( weight and volume). The tax amount also depends on the nature of the product and on the region concerned.

CRDS (contribution pour le remboursement de la dette sociale) "contribution for the repayment of social debt"

The contribution for the repayment of social debt (CRDS) was created in 1996 with the aim of reducing the indebtedness of Social Security.
The CRDS rate is set at 0.5% on the income of each French citizen.
All incomes are concerned.

Taxe foncière "Property tax"

Property tax is a local tax payable annually by the owner of a property.
The tax base is equal to 50% of the rental value of the property. For undeveloped properties, this tax base is equal to 80% of the rental value of the property and has to be paid each year.

CFE (contribution foncière des entreprises) "(land contribution from companies"

The CFE is the property contribution of companies.
It is based on the rental value of the office of the company.

CVAE (cotisation sur la valeur ajoutée des entreprises) "contribution on the added value of companies"

    The CVAE is the contribution on the added value of companies.
    It only concerns companies with a turnover more than 500,000 euros.
    It evolves depending on a progressive percentage which varies according to the amount of the turnover.
    This tax is calculated on the added value of the company.

    However, all companies or persons exercising a self-employed professional activity and whose turnover exceeds €152,500 are obliged to make a declaration of added value and number of employees, even if they are not ultimately liable for the CVAE.