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France Tax and French Tax Laws















Last partial update, April 2014

France Income Tax Rates 2014

Individuals pay in 2014 income taxes at progressive rates between 0 and 45%.
Additional 3% tax is imposed on personal income between EUR 250,000- EUR 500,000 and 4% for income exceeding EUR 500,000 for singles.
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% Up to 6,011 Euro
5.5% From 6,012 Euro to 11,991 Euro
14% From 11,992 Euro to 26,631 Euro
30% From 26,632 Euro to 71,397 Euro
41% From 71,398 Euro to 151,200 Euro
45% Over 151,200 Euro




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FRENCH CORPORATE TAX

  • The French corporate tax rate in 2014 is 33.33%. A 3.3% surtax is applied to big companies.
    The surtax is computed when the tax liability exceeds EUR 763,000.
  • Starting 1.1.2014 there is a temporary surtax of 10.7% of the tax liability for companies with turnover exceeding EUR 250 million, resulting in an effective 38% tax rate for big companies.
  • 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. Resulting in a maximum 4.56% tax rate.
  • Dividends are taxable at about 1.9% only when the shareholding exceeds 5%.
  • Withholding 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.
  • In general the tax withholding rates for other payments to non-residents are:
    • Dividend- 30%
    • Interest- 0%
    • Royalties- 33.3%
  • Losses may be carried forward indefinitely, subject to terms.
    Each year up to a ceiling of EUR 1 million and 50% of the taxable income of a certain year.
    There is a carry back of losses up to one year subject to terms.
  • 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 Companies

Foreign companies pay taxes in France when they have permanent establishments in France.
Favorable regimes are applied to expatriates.


(Previous 2009 article by Olivier Maurin, www.aetd.fr)






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