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France Income Taxes
Last updated, January 2009
FRENCH INCOME TAXES
Individuals pay income taxes at progressive rates between 0 and 40%.
The taxable revenue is divided in 2 or more shares, in relation with the size of the family.
The rates applied to each share are:
| Tax % |
Income EURO |
| 0%
| Till 5 687 € |
| 5,5% |
From 5 687 € to 11 344 € |
| 14% |
From 11 344 € to 25 195 € |
| 30% |
From 25 195 € to 67 546 € |
| 40% |
Over 67 546 € |
EXAMPLE: One family with 2 children
Revenu 90 000 €
The revenu is divided by 3 (1 share for the husband, 1 share for the wife, 0,5 share for each child).
Taxes for one share are:
| Tax (EUR) |
Income (EUR) |
| 0
| Till 5 687 € |
| 311.13 |
From 5 687 € to 11 344 € |
| 1939.14 |
From 11 344 € to 25 195 € |
| 1441.50 |
From 25 195 € to 30 000 € |
| 3691.77 |
|
Taxes due by the family EUR3,691.77x 3 = EUR 11,075.31
FRENCH CORPORATE TAX
- The corporate tax rate is 33,33%.
A specific rate of 15% is applied to small companies on profits till 38 120 €.
A surtax is applied to big companies.
The surtax is computed as follows:
(corporate tax at 33,33% - 763 000 €) 3%
- Most of the capital gains are included in the taxable income.
There is an important exception since there is an exemption for gains derived from the disposal of shares held for at least 2 years.
- Dividends are taxable at about 1,7% only when the shareholding exceeds 5%.
- Withhlolding taxes regarding outbound dividends are largely reduced by treaties signed by France.
In most instances, zero withholding tax is applied to dividends, interests, royalties paid to EU residents.
- Losses may be carried forward or carried back.
- Large tax deductions are granted such as depreciation, interests etc…
- However intangible cannot be depreciated and thin capitalization rules are applied.
- Important tax credits are granted for research and development.
Credits in excess may be reimbursed.
- Parents and affiliates may be consolidated for tax purposes but foreign companies are excluded.
- CFC rules are applied.
French: Foreign Ccompanies
Foreign companies pay taxes in France when they have permanent establishments in France.
Favorable regimes are applied to expatriates.
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