Income Tax Declaration In France: Expats Guide

Tax season in France—less fun than a wine tour through Bordeaux, but sadly, far more necessary.

If you’ve been dodging your tax declaration like a French mime avoids noise, this guide is for you.

We’re going to make the process of filing your French income tax declaration as smooth as a fine Chardonnay.

The Income Tax System In France

The French social security system is among the most generous in the world, and high taxes fund it.

The Ministry of Economy and Finance taxes both domestic and international income earned by French residents. In 2019, France implemented a Pay As You Earn (PAYE) income tax system, in which you pay tax as a monthly deduction from your salary.

If you work in a traditional job, your employer gets your tax rate from the government and deducts the corresponding monthly amount from your pay.

Social security contributions are distinct from income tax payments.

Who Pays Income Tax In France?

According to French law, you are a tax resident in France if you meet any of the four conditions listed below:

Your permanent residence (habitual residence for yourself and/or your family) is in France.
You spend the majority of the time in France (a minimum of 183 days during a calendar year. (even fewer days if you spend more time in France compared to another country).
Your professional activity takes place in France.
Your economic or financial interests are concentrated in France.

In France, Who Is Exempt From Paying Income Tax?

The French government provides credits to elderly and/or disabled tax residents. Furthermore, you should not have to pay income taxes if you earn less than €10,225 per year.

Aside from that, there are numerous tax credits that you can claim when filing your tax return.

Earnings Subject To Income Tax In France

Taxes On Income And Salary In France

All those who pay taxes in France are taxed on income earned in France. This means you have to pay taxes on the following:

Employed and self-employed income
Pensions
Investments
Dividends
Bank interest
Property
Some business income
Pensions and annuities

Taxes On Savings And Investments

The income from savings and investments is taxed at a flat rate of 30%, which includes 12.8% income tax and 17.2% social charges.

Taxes On Rental Income

If you earn money from renting out your property in France, you must notify the tax authorities in your tax return, and this income will also be taxed through the PAYE system.

The same rates apply to employment income.

General Information

This contains general information on how to indicate on the income tax declaration form financial and family benefits paid by CERN or the allowances(subsistence) processed by CERN on behalf of a third-party account (renamed “cost-of-living allowances” as of 1 January 2021).

The information provided below does not relieve personnel members of the obligation to comply with the national tax laws applicable to them, particularly those of the Host State in which they live, with which they must be familiar and must abide.

Personnel should refer to the notes sent with the income declaration form for any other income.

CERN Pensioners

CERN pensioners are taxed in accordance with ordinary legal principles, including the CERN pension. As a result, this procedure does not apply to them.

Former Personnel Receiving Unemployment Insurance Benefits From CERN

Unemployment insurance benefits paid to former CERN personnel are taxed according to normal legal principles. As a result, this procedure does not apply to them.

Furthermore, in order to assist personnel in completing their income declaration forms, the SIP Valserhône has made a document containing responses to the most frequently asked questions through the H.R. Department, which the Organization has published in accordance with the SIP.

All specific questions should be directed to your local Service des impôts des Particuliers (SIP).

Procedure

Who Must Complete A Declaration Form?

All members of the personnel (regardless of the category to which they belong) who are French residents (see point 1.1 of this document) must complete a declaration.

As a result, members of the personnel must find out whether or not they are “domiciled in France” by applying the SIP’s criteria, which are as follows:

If their primary residence is in France (especially if their spouses/partners and/or children live with them);
Or if they perform the professional activities, whether for a salary or not, in France, unless they can demonstrate that the activity performed in France is secondary;
Or if France is the center of their economic interests.

Individual circumstances, however, can only be evaluated by the SIP. Members of the personnel have to contact their local SIP if they have any questions or concerns.

When To File An Income Tax Declaration

Everyone is now required to file their income taxes online. Only those who are unable to complete an online form due to technical or other reasons may continue to submit a paper form.

Personnel who have signed up for the online declaration method will be notified of the online service’s opening. This will be done via the e-mail address they have specified in their personal account.

So they will be able to complete their income tax declaration once the online service is available.

Those who did not choose the online declaration will receive the paper form in batches from the mid of April to the end of April.

Those who do not get the form directly can download it from the Ministry of Economy and Finance website (type and search for “formulaire” in the search bar) or get it from the SIP, the Centres des Finances Publiques, or the local town hall.

How To Complete The Declaration Form

An Employee Receives An Internal Tax Annual Certificate.

Each year, the Organization imposes an internal tax (calculated using the CERN scale) on the financial and family benefits provided to personnel members.

Personnel members receive an internal tax annual certificate from the CERN administration and are thus exempt from national taxation on family benefits and finances paid by CERN.

In any event:

They must not indicate the amount of financial and family benefits paid by CERN under the heading “Traitements, Salaires,” which are subject to internal taxation by the Organization.
They must check the box marked “Divers” in Part 8 of the paper form. This section is accessible on the online declaration in “Revenus et charges” under the heading “Divers,” by checking the box labelled “Comptes à l’étranger, reprise de réductions de crédit d’impôt “.
They must include a note that says, “Member of CERN personnel subject to CERN internal taxation and, as such, exempt from tax on financial and familial benefits paid by CERN.” (CERN employee subject to internal CERN taxation and thus exempt from taxation on financial and family benefits paid by CERN). The note has to be entered at the end of the form below the heading “Informations” by ticking the box on the online version. If they submit a paper form, they must include the note on page 2 under the heading “Informations,” or on a separate page if this section is already pre-filled.
The internal tax annual certificate issued in accordance with Staff Regulations article R V 2.05: must be sent via secure messaging by connecting to the “Espace Particulier” on this website.
And also, must be sent by post to the local SIP (known as Service des impôts des Particuliers), accompanied by the reference number of the online declaration, or It must be attached to the paper declaration.

E-mails cannot be used for this purpose. E-mails are ineffective for this purpose. Personnel are encouraged to read the FAQ prepared by the Valserhône SIP.

Personnel Members Who Receive An Individual annual statement

Personnel who got an individual annual statement from the CERN administration must complete the following French tax declaration:

Report the amount of salary and different incomes that are likely to be subject to tax in the home country under the headings “Traitements, salaires – salaires source étrangère avec crédit d’impôt l’impôt français” and “Revenus de source étrangère ouvrant droit à crédit d’impôt égal l’impôt français” (box 8TK). This includes any cost-of-living allowance that is taxed in the home country.
Under the heading, report the amount of salary and other income that is unlikely to be taxed in the home country “Autres salaries imposables de source étrangère” (box 1AG)
This includes cost-of-living allowances if they are not taxed in the home country. Subtract the premium paid for a mandatory health insurance scheme from those figures.
Actual professional expenses have to be reported under the heading “Frais réels“. Do this if the cost-of-living allowance received through CERN is reported under 1AG (and thus taxable in France) (box 1AK). These expenses would be deducted from taxable income if the French authorities deemed them to be justified and related to the professional activity of an associated member of the individual sent by the employer to work at CERN. The individual has the option of deducting either a flat rate of 10% (this is applied by the fiscal authority) or actual expenses.
These expenses may include travel expenses between home and work, additional meal expenses, trade union dues, insurance premiums for professional liability, and professional training expenses. It will also include the costs of dual residency (rent, local tax (taxe d’habitation), and water/electricity bills). All costs for any other expenses justified by the member of personnel’s presence in the region for professional activities can be included, with the condition that the obligation for the member of personnel to living in a different location than the usual place of residence of their spouse /partner is justified). The declaration should include a detailed calculation of this amount. Actual evidence (like bills) must be kept by the member of the personnel in case it is required for verification by the tax authorities later.
Individual annual statements are issued in accordance with Staff Regulations article R V 2.06: Is to be sent via secure messaging by connecting to the “Espace Particulier” here.
Failing that, mailed to the local SIP (Service des impôts des Particuliers) with the reference number from the online declaration.
It must be attached to the paper declaration.

Important: Personnel who use an individual annual statement must not check the 8FV box. In the event of a specific problem, personnel should contact their local SIP.

Associated Personnel Receiving Neither Financial Nor Family Benefits From CERN, Nor A Cost Of Living Allowance

Associated personnel receiving neither financial and family benefits nor the cost of living allowance can be liable for tax in France on different sources of income.

An example of this includes remuneration paid by their home institutes and must thus be declared to the local SIP. It has to be declared even if such income is taxable in the origin country of the payment.

Income (such as remuneration paid by home institutes) is usually taxed in the country of origin. It can be subject to a double taxation agreement between the country of origin and France (which is the country of residence) in some cases, in which case it is taxed in either France or the country of origin.
If they receive remuneration from an institute outside France that is already taxed abroad, they must state at the end of the online declaration.
If they utilize a paper version of the declaration, they must include the same mention on page 2 below the section “Informations,” or on a different sheet of paper if that section is already pre-filled in.

Individuals are encouraged to contact their local SIP if they have any questions about their declaration obligations.

Other Income

Personnel is encouraged to refer to the notes included with the tax declaration form. They are available from the Ministry of Economy and Finance’s tax administration website.

They can also choose to contact their local SIP directly for specific questions about how to fill out several sections of the form to take into account different incomes and individual circumstances.

This document prepared by the Valserhône SIP also contains useful information. Users and associates who receive other forms of compensation must also read Section 3.3.

Foreign Bank Accounts

Foreign bank accounts (those located outside of France) must be declared, including those into which financial or family benefits are paid. This declaration must be renewed annually.

Special Cases

Members Of The Swiss Armed Forces Residing In France

Swiss personnel who reside in France are required to file an income tax declaration (cf. above information).

Those who have a financial connection to Switzerland. So, for example, if they own property in a canton, they should also complete and return the Swiss income tax declaration form.

U.S. Citizens And Green-Card Holders

CERN is unable to provide advice on these very specific situations and instead advises personnel to contact their local SIP and/or U.S. consular authorities. They should also consult the Valserhône SIP’s FAQ.

Tax Assessment Notice

Personnel who choose an online declaration will receive an e-mail at the address specified in their personal account as soon as their tax assessment notice is available. They will be able to consult it, download it, and, if necessary, print it.

Personnel who have completed a paper declaration and are domiciled in France receive a document titled “Avis d’impôt – Impôt sur les revenus” by post mail following their declaration.

The SIP must not receive this document. Members of the military must keep it, however, because French authorities may request it as proof of their tax situation in France.

More information is available directly from the local SIP.

Housing And Residence Taxes In France

This Organization is not authorized to provide tax information. For more information, members of the personnel are encouraged to contact a tax adviser (“fiduciaire”) or the relevant national tax authorities.

More information is present at www.impots.gouv.fr.

However, the French tax authorities would like to remind members of the military stationed in France that if they are eligible for residence and housing taxes (“taxe d’habitation” and/or “taxe foncière”) and have a French bank account.

They can choose between monthly payments, direct debit of the full amount when payment is due, or online payment for both of these taxes. Directly from the local tax office, an application form can be obtained.

Final Words

And there you have it! You’ve braved the labyrinth that is the French income tax declaration and lived to tell the tale.

Now go celebrate your newfound financial literacy with some well-deserved macarons—or maybe just a hearty sigh of relief.

Relief Ahead!

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