If you have not paid tax in your home country, now is the time to start. The French government collects tax on over 95% of its GDP. That makes it the second highest tax-paying country in the OECD. The progressive income tax system encourages redistribution of wealth. If you are thinking of moving to France, here are some things you should know. Paying tax in France means a lot more than it sounds.
The French government requires taxpayers to declare their income to the tax authorities. This means that residents of France must report all income earned from both abroad and in the country. Generally, taxes are calculated on the household income, including that of spouse, children younger than 18 and adults. French tax laws take into account the rule that U.S. taxpayers pay tax on their U.S. income in France. It can be difficult to know when to file taxes for France.
The overall structure of French taxes is irrational and developed by fits and starts. The state collected a number of direct taxes, such as the taille, capitation, and gabelle. In addition to this, the royal family was also charged with the gabelle, which was a salt tax that was one tenth of its revenue. Other taxes included internal customs duty and excise taxes on a range of different items.
When establishing a company in France, you must remember to pay the necessary taxes. The taxes you need to pay vary depending on your level of authority and the nature of your business. In France, you can set up a branch of your company if you meet certain conditions. However, foreign companies do not get any tax breaks when they set up a branch in France. However, they do have the option of reducing the tax they pay on their French-sourced income.
In addition to your personal tax, there are also taxes that are mandatory for property owners. The taxe fonciere, or property tax, arrives in the last quarter of the year, and is based on the estimated annual rental value of your property, multiplied by a certain commune’s percentage. You can pay it in installments or set up a monthly direct debit to avoid late payment charges. The last important tax to remember is the resale value of your property.
The French CIT also applies to foreign workers. However, it is possible to qualify for an exemption if you have been a resident of France for five years before you arrive. You also need to be a member of a tax consolidated group for at least five years. If you are a member of a consolidated tax group, your employer can choose to exempt 30% of the foreign worker’s income by hiring a French company.
Paying tax in France is important for Americans living abroad. While it may seem daunting, filing a tax return is essential for a US citizen living abroad. Regardless of whether you owe tax to the US government, it is important to do your taxes on time. Here are some ways to keep your tax bill down, no matter what your status. If you don’t pay US taxes, you can still file a tax return in France.