Yep – Springtime in France brings warm, sunny weather, green gardens – and taxes! We take this occasion every year to remind our community that if: 1) you are a French resident, or 2) you receive French income (eg, rental), you must file a French income tax declaration.
Do I need to file a French tax declaration?
How do you know whether you’re a French resident for tax purposes? You are considered to be ‘fiscally resident’ in France if you spent at least 183 days in the country during the calendar year (1 Jan-31 Dec). Even if that is not the case, you could still be considered a fiscal resident if any of the following conditions apply, according to Article 4B of the Code Général des Impôts (CGI):
- Your main home is in France
- You spent more time in France than any other country during the calendar year
- Your spouse and children live in France (even if you work abroad)
- You are working in France, either as an employee or for yourself
- Your main economic interests are in France
What income do I need to declare?
If you are considered fiscally resident in France, you will need to declare your global income, regardless of where it was earned or whether you’ve already paid tax on it in another country*. You may end up owing zero income tax in France, but you are still required to file the declaration on time. If you are not a fiscal resident but still have French income, you would only declare income earned in France on your French declaration.
Types of revenue are subject to income tax:
- Wages, earnings, salaries
- Unemployment benefits
- Business or rental income
- Non-commercial or agricultural profits
- Capital gains, investment income, savings interest
- Pensions and annuities
- Income from stocks, shares and dividends
What else do I need to declare?
All foreign financial accounts must be declared on the form 3916. Credit cards and online payments accounts (i.e. Paypal) should be declared, if there was a total accumulated spending of more than 10k€. However, the law is not very clear and the penalty for not disclosing is however very clear – 1500€ per account nondisclosed!
Make sure that you declare ALL accounts; it doesn’t hurt as the balance amount is not requested.
*But I already pay tax in my original home country on some or all of these. Will I pay tax twice?
France has ‘double taxation agreements’ or ‘treaties’ with many countries to avoid residents paying tax twice on the same income. For instance, if your income is already taxed at source in the country of payment, you will not pay that tax again in France.
If your tax situation is complicated, it is definitely worth finding a good accountant with knowledge of your country’s tax treaty. Renestance can recommend English-speaking accountants.
When do I need to file?
2022 Tax season officially opens on April 7th, and the online filing deadlines vary according to which department you are living in.
Departments 01 to 19 Deadline Date: Tuesday, 24th of May, 2022 (by 23:59/11:59 pm)
Departments 20 to 54 Deadline Date: Tuesday, 31st of May, 2022 (by 23:59/11:59 pm)
Departments 55 to 974/976 Deadline Date: Wednesday, 8th of June, 2022 (by 23:59/11:59 pm)
How do I file my declaration?
Currently you declare the previous calendar year’s revenue and expenses. So this year (2022) you will be declaring according to your situation between 1 January – 31 December 2021. Unmarried couples should complete separate tax returns. If you are PACSed (similar to a civil union) you can choose whether to make joint or separate tax declarations.
If you have declared previously, you should have already received your online link to complete the declaration for this year, with some of the fields pre-filled for you. If your situation has changed in any way, you need to ensure that your tax declaration reflects this; whether you have moved and your address is different, or your financial situation has altered.
If you changed none of the pre-filled fields in last year’s declaration, and nothing changes again for this one, your declaration can be automatically filed this year – you have nothing to do!
Here is the link to the Government tax site for declaring taxes: https://www.impots.gouv.fr/portail/.
If you are filing for the first time, you can either:
- File a paper declaration (ask your local tax office for the form 2042 to complete). The deadline for paper declarations is Thursday, 19th of June, 2022.
- Use your tax number to access the online portal above.
- If you do not have a tax number, you can request one from your Centre des Impots (personal tax department) at the counter or using a form available in the “Contact” section located at the very bottom of the home page of the impots.gouv.fr site > “You are a private individual” > “Your request concerns access to your private space” > “I do not have a tax number”.
- Once your space has been created, you will be able to access the online declaration service.
What happens next?
You should receive your tax statement – ‘Avis d’impôts’ – in August/September, unless you are a first time declarer, in which case it may be a month or so later. Along with this statement will be the amount you owe and the payment deadline or the amount of your refund.
How can I reduce my income tax bill?
You may be able to benefit from tax credits (crédit impôts), allowances and other concessions. For example:
- La Prime d’Activité – You may be eligible to receive this if you are working and your income is below a certain level;
- If you implement energy conservation features in your home;
- If you invest money in an assurance vie investment policy (This is a certain type of savings investment account with tax benefits and not term life insurance that pays out on your death);
- If you contribute to certain pension plans;
- If you give to charity;
- Other tax credits are available for employing domestic help, child-carers (for children under 6), school fees for collège and lycée;
- If you declare rental income and expenses;
- Property purchase schemes (défiscalisation) that have attractive tax breaks, such as the Loi Pinel.
What’s changing from last year?
- Mileage scale revised up by 10%
- Costs related to teleworking: exemption up to a limit of 580 euros
- Sustainable mobility package: the exemption ceiling increased to 500 euros
- Widows of veterans: the granting of the additional half-share relaxed
- DRITI Declaration, new name for the Unified Declaration of Independents
- Increase in the profit of companies that do not adhere to an OGA reduced to 15%
- Dedicated tax credit for the installation of an electric charging station
- Renovation tax credit: maintained in the event of a deposit paid in 2019 or 2020
- Dedicated tax credit for 1st subscription to the political and general information press
- Tax reduction increased to 75% for donations to religious associations
- Reminder of the new features of the 2021 declaration on 2020 income
Read about it here: https://www.toutsurmesfinances.com/impots/impots-2021-ce-qui-change-pour-la-declaration-des-revenus-et-charges-2020.html
Why should I do a French tax declaration if I won’t owe any tax?
First of all, if you are a resident or earn income in France, you have a legal obligation to file an income tax declaration. Ignorance is not an acceptable excuse, and you could face penalties for not filing! Secondly, the tax notice (avis d’impôts) that you receive a few months after the declaration is what we call ‘administrative gold’. It proves your residency, that you are paying taxes (and therefore abiding by the law!), and can be used as proof of financial resources. It facilitates almost every administrative task in France, including renting or buying a home. Also, if you want to apply for permanent residency or French nationality, you’ll need to show at least five avis d’impots. There are also many tax advantages in France that you can only access once you have a tax ID.
Where can I find help?
If you are looking at your ‘Déclaration d’impôts sur le revenu’ form and scratching your head, you may want an accountant to help you. But you need to do this quickly, as you won’t be the only one looking for an accountant right now, and English-speaking ones are rather rare. Contact Renestance for a recommendation.
Alternatively, if you speak French, you can ask your local Centre des Impots for help.
Good luck and remember, Renestance is always here to help with your French administrative questions!
Dennelle is the President of Renestance and a bilingual American who’s lived in France since 2000. She loves so many things about France, its language, culture, geography, quality of life... that she started a business to help others realize their dreams of living in this incredible place.
All articles by: Dennelle Taylor Nizoux