Paul W. Says:
I am looking to move to the Toulon area of France. I was wondering how the tax rate is.
IL France Correspondent Tuula Rampont Says:
Hi Paul,
Taxes in France really depend on your residence status. If you don’t work in France, which represents a large portion of people who come for retirement, the great news is that you don’t really need to worry about French taxes—outside of property taxes on a home or apartment you may purchase.
Although you will need to file a tax return in France if you live 180 days or more in the country, you can’t be double-taxed on passive income you receive from the United States. Since you’re already paying taxes to Uncle Sam back home, any Social Security or pension income is exempt from taxes.
If you receive any monies from capital gains, those are first taxed at the US rate, and then you would receive a tax credit for France. If France has a higher rate of capital gains tax, you may or may not have to make up the difference. For investments, it’s best to seek out the expertise of a tax professional who deals with Americans living in France. You can contact Jonathan Hadid, a tax specialist who helps with this: www.hadtax.com.
The only other concerns would be property tax or if you sold a house or an apartment in France. Property taxes are around one-tenth of what we pay in the United States. Any profit from the sale of property would be subject to a 19% tax, with an additional 2% to 6% tax for gains of €50,000 or more.
If you were a salaried French employee, you would then be required to pay into the tax system, which is a progressive rate—ranging from 8.5% for modest incomes and then climbing to 30% and above for high income earners.
I hope that answers all of your tax questions. Best of luck on your move to France.
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