Taxes in France: An in-depth guide for US expats

For American expats contemplating – or already enjoying – life in France, mastering the nuances of taxes in France is essential to staying compliant on both sides of the Atlantic. From determining residence status to understanding how France’s progressive income tax applies in 2025 – accurate knowledge now prevents costly surprises later.

This concise guide distills the latest rules, deadlines, and reliefs that help you avoid double taxation and file with confidence.

A quick overview of the French tax system

France’s framework for taxation in France is residence-based, yet treaty coordination means most expatriates avoid dual assessments. Although the headline tax rate reaches 45%, only a small percentage of households hit that ceiling, while credits and abatements temper the effective burden.

Meticulous alignment of filings keeps French income tax and US obligations in sync, ensuring each percentage of tax paid counts only once. Understanding both French law and the Internal Revenue Code is vital to maximising relief at every taxation bracket.

NOTE! Even when the Foreign Earned Income Exclusion wipes out US liability, Form 1040 and all required international information returns must still be filed on time to preserve treaty benefits and foreign tax credits.

Determining your French tax residency and liability

Every expat who wants to stay on the right side of taxes in France must first pin down where they are deemed resident for income tax purposes. Under Article 4B of the French General Tax Code, meeting just one of the tests below makes you a French tax resident – and therefore taxable on worldwide income.

• Main home or habitual residence (foyer) is in France – this refers to your primary dwelling or the place where your immediate family resides. Even if you spend considerable time abroad, France is considered your tax home if it’s where your spouse or dependent children live most of the year.
• Principal place of stay – you spend at least 183 days in France during the calendar year, or more days here than in any other country. This test emphasizes actual physical presence, making it especially relevant for dual-country residents or frequent travelers.
• Primary professional activity is exercised in France – if your main employment or self-employment takes place in France, you’re typically treated as a tax resident. Temporary or marginal foreign contracts generally don’t override a primary work base in France.
• Centre of economic interests – France is where you manage your finances, hold bank accounts, direct investments, or derive the majority of your income. Even if you’re frequently abroad, having your wealth and economic control anchored in France makes you a resident.

If none of these conditions apply, you remain a non-resident, liable to French income tax only on French-source earnings – generally at a minimum rate of 20% up to €29,315 and 30% above that.

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French income tax

France applies a progressive income tax schedule anchored in the quotient familial household system, so liability is calculated on family shares rather than individual returns.

The French income tax rates were re-indexed for inflation under the 2025 finance law, ensuring each tax rate band moves up slightly while preserving progressivity for residents and expats alike.

The current income tax rate bands are shown below, applied to net taxable income after statutory deductions.

Beyond these brackets, social levies and the exceptional contribution on high income may also apply, depending on status and worldwide income. Always review current guidance before filing to confirm any mid-year adjustments or supplemental charges.

Other taxes in France

Beyond the headline income brackets, a mosaic of additional French taxes can still catch even seasoned expats off guard.

Value added tax (VAT)

French VAT – locally TVA – is everywhere: the standard rate is 20%, with a mid-tier 10% for restaurants, transport, and most home renovations, 5.5% for essentials such as food, books, and utilities, and a super-reduced 2.1% for certain reimbursed medicines. Prices displayed in shops already include VAT, so visitors rarely see the charge at the till.

Because businesses deduct the VAT they pay on inputs from the VAT they collect on sales, the tax is a major revenue engine for the state. A 2025 finance law measure introducing a single €25,000 VAT-exemption threshold has been deferred until at least January 2026.

Capital gains tax

Property taxes

• Taxe foncière (TFPB) – levied on owners, calculated from the cadastral rental value minus a 50% allowance; average 2025 bills still translate to roughly €10 – €20 per m² once local rates are applied.
• Taxe d’habitation – abolished on main homes but still due on second homes, with surcharges in high-pressure areas.
• A separate waste-collection levy (TEOM) rides on the TFPB notice.
• Most communes have signalled another inflation-linked 1.7% base uplift for 2025, keeping local coffers healthy.

Wealth tax on real estate (IFI)

Although France's highest tax rate on ordinary income remains 45%, the IFI can add an extra layer for high-end property owners.

1. Applies once net real-estate assets exceed €1.3 million.
2. Progressive schedule: 0% up to €800,000 → 1.5% above €10 million.
3. Principal residence enjoys a 30% rebate; new arrivals get a five-year exemption on foreign property.
4. Determination and payment are folded into the annual income tax filing under the 2025 finance law.

Inheritance & gift taxes

Transfers between spouses are exempt, but everyone else faces progressive bands that run 5% – 45% for children and up to 60% for unrelated beneficiaries, after allowances as high as €100,000 per parent and child. Gifts made within 15 years of death are clawed back into the estate, so early planning matters.

Because the US–France estate tax treaty gives credits rather than exemptions, expats often need coordinated advice on both sides of the Atlantic. A lively policy debate in late 2024–2025 has put the structure – rather than the rates – under review, but no changes have yet passed Parliament.

Exit tax

Triggers when an individual moves tax residence and either holds over 50% of a company or owns shares worth €800,000+.

• Unrealised gains are computed on departure, but the tax can be deferred.
• Obligation lapses after 2 years if the shares are worth < €2.57 million; 5 years if above.
• Designed to prevent a quick offshore sale and reinvest.

These ancillary levies, together with France’s progressive income scale, complete the fiscal picture that expats must master before signing a contract – or booking a removal van – for life under the Tricolore.

Guide to French income types

Imagine a Boston-born designer now freelancing in Lyon – every euro she earns must be slotted into the right box when the France income tax return opens in April. Knowing where each stream sits is how professionals trim French income tax and steer clear of audits.

1. Employment income (Traitements et Salaires) – Salaries, bonuses, and taxable perks are pooled, then scaled against the 0%–45% barème provisionally rolled forward for next year's filings. Social Security and the 10% frais-pro deduction come off first. Rates flow from Article 197 CGI, due for re-indexation in December 2025.
2. Equity compensation – Gains on exercising stock options or vesting RSUs count as extra pay under Articles 80 bis and 80 quaterdecies CGI. They face the same progressive income tax in France, while later share sales fall under the 30% PFU or the scale at the taxpayer’s choice. Social levies bite when the benefit crystallises.
3. Business & self-employment (BIC/BNC) – Net profit of sole traders and freelancers is taxed via the French income tax brackets, or under the micro-entrepreneur régime with abatements of 34%–71%. Article 50-0 CGI sets the micro caps (€188,700 goods, €77,700 services for 2025 income). Cotisations sociales are swept monthly through URSSAF.
4. Investment income – Dividends and interest default to the 30% Prélèvement Forfaitaire Unique – 12.8% income tax plus 17.2% social charges – per Article 200A CGI. Taxpayers may elect the progressive schedule if it wins, claiming the 40% dividend abatement and partial CSG deduction. Income tax in France is not withheld on foreign accounts, but Form 3916 remains compulsory.
5. Inbound assignee regime (Art 155B CGI) – Qualifying newcomers can exclude the impatriation premium and up to 50% of foreign-source passive income for eight years, provided they were non-resident during the preceding five. Services rendered abroad may also shelter up to 20% of the salary. This carve-out keeps France income tax light for globally mobile talent.

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Social security and pension contributions in France

From January, payroll cycle (covering 2025 income), employees still contribute roughly 15%–24% of gross pay to Sécurité Sociale and the compulsory Agirc-Arrco pension, while employers bear about 35%–47%; the precise split depends on salary band, accident-risk rating, and any general-reduction relief.

These cotisations finance health, maternity, disability, unemployment insurance, and two pillars of old-age coverage, guaranteeing every worker a basic pension plus points in the supplementary scheme. The deductions are withheld at source alongside income tax, yet they fund a separate social-protection budget.

US expats enjoy protection against double taxation thanks to the US–France Totalization Agreement, which keeps short assignments (typically up to five years) under US FICA and longer postings under the French system.

Periods of coverage in both countries can be totalized to satisfy the minimum eligibility for retirement or disability benefits. Because French cotisations trim taxable pay, they also soften the expat’s French income tax liability while safeguarding future pension rights.

Tax deductions and credits available for expats

Employment-related deductions

The French government applies an automatic 10% deduction to salary and pension income to reflect routine job costs, with the ceiling fixed at €14,426 for 2025 earnings (the index for 2025 income filed in 2026 may follow the same inflation-linked formula). Expats whose real commuting, professional training, or telework expenses exceed that ceiling may elect the frais réels method and deduct the documented totals instead. Keep every receipt – the DGFiP can request supporting evidence during a post-assessment review.

Personal deductions

Court-ordered alimony or child-support payments remain fully deductible, subject to the current per-child limit of €6,794 and strict proof of payment. Approved gifts to qualifying French charities yield a 66% income-tax reduction, rising to 75% on the first €2,000 of donations, up to 20% of taxable income. Certain employee social-security top-ups and unreimbursed health-insurance premiums may also be deducted when they are compulsory or contractually owed.

Personal allowances via the quotient familial

The quotient familial splits household taxable income by the number of parts, lowering the rate applied to each slice. Each spouse counts for one part, the first two dependent children add a half part each, and every further child adds a full part, with the per-half-part benefit capped at €1,791 for 2025 taxation. This mechanism often yields the largest single reduction for US families, especially where one partner earns the bulk of household income.

Key tax credits

Child-care costs for children under six trigger a credit equal to 50% of eligible expenses, capped at €3,500 per child (maximum credit €1,750). Hiring domestic help – cleaners, gardeners, in-home carers – unlocks a 50% credit on qualifying wages up to €12,000 per year, with higher ceilings for dependents or seniors in the household. Home-adaptation work for older or disabled taxpayers still attracts a separate credit of up to 25% of eligible spending, dovetailing with the MaPrimeRénov grant scheme.

Overall cap on benefits

Total annual tax reductions and credits (excluding certain overseas investments) cannot reduce your 2025 tax bill by more than €10,000; any surplus is simply added back to the amount due. For qualifying overseas investments, the combined ceiling rises to €18,000. Plan large projects over several years to stay beneath these limits and maximise relief.

How to file French taxes as a US citizen

Step 1: Obtain your 13-digit numéro fiscal at the local Service des impôts des particuliers by presenting valid ID and proof of French residence. First-time filers can also request it online if they already hold French social-security credentials.

Step 2: Activate a personal account on the French taxation portal with your numéro fiscal and the one-time access code from your last payslip or tax notice. This secure space lets you file, amend, and track every tax matter in real time.

Step 3: Open the 2042 return for income year 2025, verify pre-filled data, and add worldwide earnings plus schedules 2047 and 3916 to report foreign income and bank accounts. Include US-source income even if it will be offset by foreign tax credits.

Step 4: Validate the calculation, sign electronically, and transmit the declaration between April and the departmental cut-off dates expected from 20 May to early June; paper filers must submit by 20 May. Late filing triggers a 10% surcharge.

Step 5: Download and archive the accusé de réception immediately, as both French and US authorities accept it as proof of timely filing. Keep it with your federal return to protect the statute of limitations.

Step 6: Check your avis d’imposition posted in August, and compare it with your records. Dispute any discrepancy within 90 days online or at your tax office to avoid interest charges.

Key French tax forms for US expats

The 2026 filing season (covering income earned in 2025) brings no new paperwork surprises, but knowing which forms to reach for – and why – is half the compliance battle.

Tax forms American expats must file with the IRS

1. Form 1040: Your global income “home base.” Every US citizen or green-card holder files this return once their 2025 income tops the standard filing thresholds.
2. Form 2555: Claims the Foreign Earned Income Exclusion, now $130,000 per qualifying taxpayer for the 2025 tax year. Use it only if you meet the bona fide residence or 330-day physical presence tests.
3. Form 1116: Calculates the Foreign Tax Credit, letting French income taxes offset US liability dollar for dollar – often wiping it out when French rates exceed US rates.
4. Form 8938: FATCA asset report. Required when your specified foreign financial assets exceed $200,000 (single) or $400,000 (married filing jointly) on 31 Dec 2025, or higher mid-year thresholds.
5. FinCEN Form 114 (FBAR): E-filed with Treasury, not the IRS, if your combined foreign account balances ever top $10,000 during 2025.
6. Form 8833: Discloses any treaty position you take under the France–US income tax treaty (for example, to avoid double withholding on French dividends).

Tax forms Americans file with the French tax authorities

• Formulaire 2042 – Core French income-tax return (comparable to Form 1040). All French-source and worldwide income is ultimately summarized here.
• Formulaire 2047 – Details any income received outside France (wages, pensions, dividends) so it can be taxed – or credited – correctly under treaty rules.
• Formulaire 3916/3916-bis – Declares every foreign bank, brokerage, crypto, or life-insurance account, active or not; penalties start at €1,500 per undisclosed account.
• Formulaire 2044 – Itemizes rental income and deductible expenses for unfurnished French property; required once gross rents exceed €15,000 or when you opt out of the micro-foncier regime.
• Formulaire 2074 (and 2074-CMV) – Tracks capital gains and losses on shares, funds, and other securities; often generated automatically by a broker, but still must be attached to your 2042 when gains arise.

Need tailored guidance? Taxes for Expats’ specialists navigate the US tax systems daily, so your 2026 filings are accurate, penalty-free, and optimised for every credit, exclusion, and treaty break available.

How to avoid double taxation as a US expat in France

Foreign Tax Credit

For 2025 income reported on your 2026 US return, Form 1116 should let you claim a dollar-for-dollar credit for French income taxes that are compulsory and not refunded, including the 9.7% CSG/CRDS levies. Because France’s top marginal rate is 45% – often higher than the equivalent US bracket – most expats fully offset their US liability and can carry unused credits forward for up to ten years.

Foreign Earned Income Exclusion

In 2026, you may instead elect the Foreign Earned Income Exclusion, which shields up to $130,000 of 2025 salary and self-employment earnings if you meet the bona fide residence or 330-day physical presence test. Remember that choosing the exclusion generally bars you from using the credit on the same income, so model both options before filing.

Tax treaties

The 1994 US–France tax treaty allocates taxing rights and reduces or eliminates French withholding on dividends, interest, and royalties, but its Article 29 “saving clause” allows the United States to continue taxing citizens as if the treaty did not exist. Even so, invoking treaty provisions such as the tie-breaker residency rules can prevent dual residency and secure favourable source-of-income treatment that maximises either the credit or exclusion.

Reporting foreign bank accounts (FBAR)

Apart from income-tax planning, FinCEN Form 114 must be filed electronically if the aggregate value of your French bank and investment accounts topped $10,000 at any point in 2025. The standard due date is 15 April with an automatic extension to 15 October, and failure to file can trigger substantial civil penalties even when no tax is due.

Key tax deadlines in France (2026)

Below is the provisional 2026 calendar for filing 2025 liabilities. DGFiP confirms only that the campaign opens in April 2026; the exact cut-off dates are traditionally published each spring and follow the same late-May/early-June pattern shown here.

All France tax system entries will be re-checked once the official arrêté appears.

1. Mid-April – online portal opens for 2025 income tax returns
2. 20 May – paper income-tax returns due nationwide
3. 22 May – Zone 1 online filing deadline (départements 01-19 & non-residents)
4. 28 May – Zone 2 online filing deadline (départements 20-54)
5. 4 June – Zone 3 online filing deadline (départements 55-976)
6. Mid-June – IFI return (real-estate wealth) submitted with income return
7. 15 September – IFI balance-due payment auto-debited
8. Mid-October – taxe foncière payment deadline for property owners
9. Mid-December – taxe d’habitation deadline for secondary residences

NOTE! Exact days for bullets 6-9 will be finalised when DGFiP releases its 2026 payment calendar.

Get expert help with your French taxes

Taxes for Expats specializes in helping US citizens meet their US tax obligations while living in France. We offer a free tax extension service to coordinate your US filings with France’s tax calendar to ensure full compliance.

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