France taxes residents on worldwide income and non-residents on France-source income only. For personal income tax specifically, France operates an administrative assessment system taxpayers file a return (increasingly pre-filled with third-party data, including data captured through the withholding-at-source system introduced in 2019), but the tax administration (DGFiP) computes and issues a formal assessment notice (avis d'imposition) determining the final liability, distinct from what the taxpayer self-reported.
The French tax year is the calendar year. The individual filing deadline varies by department/region and by filing method (paper vs. online), typically falling between late May and early June of the following year, confirmed annually by the French tax administration (DGFiP).
France's headline corporate income tax (CIT) rate is 25%.
The headline personal income tax (PIT) rate is 45% plus surtax and social surcharges.
The standard VAT/GST (or equivalent consumption tax) rate is 20%.
Under Article 4B of the French General Tax Code (CGI), an individual is a French tax resident if any one of three alternative tests is met: their home (foyer) is in France, France is their principal place of stay (in practice, more than 183 days), or France is the center of their economic interests. Meeting any single test is sufficient - residents are taxed on worldwide income, non-residents only on French-source income.
A non-French entity has a French permanent establishment through a fixed place of business, a dependent agent habitually concluding contracts in France on the entity's behalf, or (for VAT purposes specifically) a distinct set of tests - the precise threshold depends on the applicable tax treaty, which France's tax authority applies alongside its own domestic-law standard.
France's CFC regime under Article 209 B of the CGI applies where a French company liable for corporate income tax holds, directly or indirectly, more than 50% of the shares, voting rights, or financial rights in a foreign entity established in a jurisdiction with a "privileged tax regime" - defined as an effective tax rate at least 40% lower than the French effective rate, or full tax exemption. Where triggered, the foreign entity's profits are deemed distributed to the French parent and taxed in France even without an actual distribution. An exception applies for EU/EEA entities and, outside the EU, where the taxpayer proves the foreign entity's principal purpose is not tax-driven profit relocation.
Since a 2019 reform (implementing EU ATAD), all French CIT taxpayers may deduct net financial expenses up to the higher of €3 million or 30% of tax-EBITDA; the prior separate thin-capitalization, "Carrez," and "Rabot" mechanisms were repealed. A taxpayer is additionally treated as thinly capitalized if its average related-party debt-to-equity ratio exceeds 1.5 and it cannot show its overall group debt-to-equity ratio is comparably leveraged (safeguard clause) - triggering stricter limits on related-party interest and carryforward capacity. Separately, interest paid to a direct shareholder is capped at a published reference rate (an "arm's length" market-rate alternative is available if higher).
France does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics under French domestic law and case law comparing it to recognized French entity types. France has implemented ATAD2-aligned anti-hybrid rules under Article 205 B of the CGI, denying deductions for payments that produce a hybrid mismatch outcome (double deduction or deduction without inclusion) involving a related party or structured arrangement.
A French resident (individual, association, or entity not carrying on a commercial activity) must declare the existence of any foreign bank account, foreign life-insurance contract, or foreign digital-asset account on their annual income tax return (via Form 3916), regardless of the account balance - there is no minimum threshold. Non-disclosure penalties are EUR 1,500 per undisclosed account (EUR 10,000 if the account is held in a jurisdiction that has not concluded an administrative-assistance agreement with France to combat tax fraud and evasion), and can extend the tax authority's assessment/reassessment window. This is an account-existence disclosure requirement rather than a full balance/transaction reporting regime, but it is France's own genuine domestic foreign-account reporting mechanism, distinct from France's separate participation in CRS automatic exchange described under Treaty Network below.
France provides a participation exemption (regime mere-fille, "parent-subsidiary regime") for qualifying dividends: a French parent company holding at least 5% of a subsidiary's capital for at least 2 years can exclude 95% of dividends received from taxable income (5% added back as a deemed expense proxy for costs of holding the participation). A separate long-term capital gains regime applies a reduced effective rate to gains on qualifying substantial shareholdings, taxed at a small fraction of the standard rate rather than full exemption.
France's relief from double taxation is mixed rather than a uniform credit: many of France's tax treaties apply an EXEMPTION-with-progression method for foreign-source income (excluding it from the French tax base while still counting it toward the progressive rate), while other treaty categories and unilateral relief situations use an ordinary tax credit capped at the French tax otherwise due. The applicable method depends on the specific treaty and income type - do not assume a single mechanism applies uniformly across all French-source double-taxation situations.
France maintains double tax treaties with more than 120 countries. Coverage is not static: recent treaty terminations include Mali and Niger, while treaties with Denmark and Greece were renegotiated after earlier lapses, and certain provisions of the France-Russia treaty (covering permanent establishments, business profits, dividends, and royalties) have been suspended since August 2023. Newer treaties with Belgium, Finland, Rwanda, and Cyprus were signed but remained unratified and not yet in force as of the most recent update. Always confirm a specific treaty's current status before relying on it.