What is the income tax in France? This question cannot be answered right away, if only because the tax system in this country is confusing. But we will still open the topic, after explaining what other taxes for individuals exist in the country.
general information
Income tax in France is considered one of the highest in the world, even though the country is a member of the European Union and the European Economic Community. Why are taxes in the country considered very high? This is mainly due to the fact that France has an exclusive role in both the economic and political spheres among European states.
The country has developed a two-system taxation. What does it mean? We are talking about the fact that taxes are levied both at the local and national level. It is worth noting that such a structure is relevant for many European countries.
Major taxes are divided into three categories:
- Income tax in France. And we are talking about tax for legal entities and individuals.
- On the capital and property of the subject. This includes vehicle or property tax.
- Consumer taxes. A vivid example would be VAT or excise taxes.
What should individuals pay?
You already know that the income tax in France is very high, but often its size does not all represent correctly. From this there is a lot of misunderstandings and grievances. Meanwhile, the high tax rate is explained by the fact that the country's population has a large income, although for a Russian citizen the figure will indeed seem shocking.
Not so long ago, France made some changes to the size of the income tax, thereby causing a wave of dissatisfaction among the population with increased rates. Basically, the changes affected very wealthy citizens, which ordinary people only supported. But there were those of the rich who defiantly renounced French citizenship due to the fact that the amount of tax became very, very large.
What is the income tax in France now? We understand further.
How to find out the amount of tax?
In order for a person to know how much he owes to the state, it is necessary to determine which group of taxpayers he belongs to. In the country, each category has its own rates.
To the question: “What is the income tax in France?” it is impossible to answer specifically, because a progressive scale has been established in the country, thanks to which different segments of the population pay different amounts. Such a system is considered as fair as possible and is approved by citizens. By the way, the range can reach both 0% and 56%.
When comparing the French tax and the same fees in other countries, for example, in the USA, you can see that France is ahead of other countries in terms of payments.
It is also important when calculating the income tax in France as a percentage and marital status. How does it affect? Yes, it’s very simple: for single people and for family citizens, the amount of tax will be different. Why is this happening? For example, a citizen is divorced, but he has a minor child. This, of course, will affect the amount of tax. The same is true for parents with many children and some other circumstances.
It is important that a person, before determining the calculation base for personal income tax, correctly calculate all expenses that are not subject to taxation. These include children's education, medical care, expenses for providing family members who do not have a source of income, and so on. If everything is done correctly, then the income tax in France as a percentage will be much less.
In addition, the country provides certain benefits to certain categories of citizens. Among them are military personnel, active patrons and other people. You can’t just go to the tax office and claim benefits or deductions without presenting any documents. Each relief should be documented.
In addition to income tax, in France, individuals are also charged an amount for social and health insurance. This applies only to employed citizens, because the employer makes deductions from the employee’s salary.
Topical
It is important to understand that for emigrants there is a relief in terms of payments. This applies to those who are not yet a resident of the country and have been in the state for less than six months. The small size allows during the adaptation period to pay all fees without any problems.
In France, the Tax Code is constantly being amended due to the fact that the country's parliament approves a budget every year that directly addresses the issue of taxation.
Let's look at the features of the French fiscal system.
Features of taxation in France
First of all, it is worth noting that all taxes have a social orientation, while taking into account the interest of the provinces. But the main role is still occupied by the income tax in France from individuals and legal entities.
Since the country has a high standard of living, then the budget is formed mainly by taxes. The timely payment is monitored by the French tax service.
What taxes are there in the country?
In addition to personal income tax, other taxes are levied in France. A person begins to pay them when they reach adulthood.
The tax is calculated according to the data that the citizen submits in the declaration. By the way, in Russia taxes are charged in much the same way.
Let's look at the most popular taxes in the French Republic.
Income tax
It so happened that income tax in this country is considered the main. All citizens of the country must pay it, regardless of income. Even non-residents pay it with the caveat that only the amount received as income in the country is subject to payment. As for residents, they pay income tax on all received money and it does not matter where they came from.
It is important to understand that the personal income tax in France depends on the amount of income.
The same Russian, after arriving in France within a year, is obliged to contact the tax office and take a declaration. At the same time, it is necessary to fill it out even in a situation where no work was found in a year. If there are problems with filling, then a person can contact the tax service, where they will help him.
Tax deductions
And yet, what is the income tax in France? How much should be given to the state? We have already said above that this question cannot be answered accurately. It all depends on how much a person earns. But there are certain nuances here, for example, whether tax deductions were correctly calculated.
Individuals are tax deductible, they allow a good reduction in the amount of tax, but they must be considered correctly. So what are we talking about?
- Costs of housing construction and its protection.
- Professional expenses. This includes both the cost of acquiring work equipment and the cost of renting a room for production activities or paying for continuing education courses.
- Health insurance costs.
- Expenses for a legally incompetent family member.
- Payment for the maintenance of children in preschool institutions, universities, lyceums and schools.
- Charity expenses.
In order to exempt yourself from tax thanks to these articles, you must provide documents confirming the tax deduction.
What is the tax charged
What is the income tax in France now? We still cannot name a clear amount, but we will tell you why it is charged. For individuals and residents, points of income are provided, from which fees are taken.
This is about:
- Lease of property. In another way, this is called rent.
- Income from commercial activity.
- Profit from non-profit activity.
- Pensions and salaries.
Regardless of the amount of income tax in France, it is required to pay not only single people, but also families. Simply put, spouses can file a joint declaration. This is permitted because French law recognizes husband and wife as a single tax unit. Moreover, the type of such unit or category to which they relate is taken into account. Only after classification is the percentage of income tax assigned: from a minimum of 5.5% to the maximum.
Bid amount
In France, the income tax rate consists of two factors: a special ratio and income. If the income is more or less clear, then the coefficient should be described in more detail.
A special coefficient is assigned depending on the classification:
- Persons without children and unmarried are assigned a coefficient of 1.
- Officially married people are assigned 2.
- Spouses with one child under the age of majority are assigned 2.5.
- For couples with three children or more, the coefficient is charged from 3. How does it work? If the family has two children, then the coefficient is already 3. For each subsequent child, another 0.5 is added.
It is important to understand that, when answering the question of how much interest income tax in France will be for a particular person, it is necessary to take into account the equality of families with one and two parents. At the same time, single-parent families have their own benefits, which also relate to taxes.
Tax calculation
What is the salary income tax in France? Since we cannot name the exact amount, it will be considered in the range. So, there is a special table in which the decree of income and percentage of tax. One will be levied on the fiscal unit. Let's look at it.
- The tax is not levied if the citizen's income is less than 5 963 euros.
- When income varies from the minimum amount (indicated above) to 11 896 euros, the percentage of income tax is 5.5.
- People earning up to 26,420 euros will pay 14%.
- 30% is charged from those who receive up to 70 830 euros.
- A tax of 40% is required to pay people who have an income of at least 150,000 euros.
- Income up to a million euros is taxed at 45%.
- Well, the real rich, who have more than a million in European currency, pay 48% to the budget.
The final rate is calculated using a certain formula. The total income of the fiscal unit is divided by the assigned coefficient. After that, income tax is calculated at a rate that depends directly on the income of this cell.
So it turns out that the income tax in France is for each person their own amount. By the way, the country's population is very happy with such a system of taxation, because everything is done fairly.
If we looked at the income tax scale in France, then it’s time to move on to other taxes that individuals must also pay.
VAT
In France, VAT is levied on the price at which goods or services are sold. It is noteworthy that the scheme for paying this tax is inconsistent, which means it changes very often.
There are categories of individuals in the country who pay tax according to a simplified scheme. In addition to individuals, enterprises with an annual turnover of more than 230,000 euros are exempt from tax.
Who does not need to pay VAT
If the personal income tax in France is charged on individuals, then some categories of citizens are exempt from VAT. Who is it?
- Teachers of educational institutions. This applies to all levels of education.
- Medical workers.
- People who do charity work. It is important that the activity is documented.
By the way, VAT payments are not imposed on gambling establishments and insurance companies.
Property tax
We have already told you everything about personal income tax in France, but this is not the only tax that citizens must pay.
Among others, there is a property tax. The real estate market in France is very stable, which attracts foreign buyers and local residents. After buying an apartment or a house, the owner is obliged to register it for himself. To do this, you must visit the notary's office.
When buying only built housing, the tax is unlikely to be more than 3%. If the property was commissioned more than five years ago, then the tax rises to 6%. It is worth noting that the age of the house is calculated at the time of purchase.
France has an annual property tax. The size of this tax is also set individually for each person. For calculation, you need the area of the house and its location.
In France, it is customary to trust a realtor to purchase real estate. This is because only a specialist can properly execute the paper and the landlord is exempted from paying tax for five years.
Inheritance tax
Although income tax in France has been canceled at 75%, there are still many other taxes that make up a very impressive amount, such as inheritance tax. It is about paying a fee when receiving an inheritance. The tax is usually flat or house. The rate of such a tax is also variable, it depends on the value of the property and the degree of relationship between the testator and the heir. Sometimes the tax can reach half the value of the inheritance. In this case, it is easier for the recipient to sell the property in order to pay off the state.
Wealth tax
Since France adopted a fair tax system, that is, a tax on wealth. What are you talking about? People who have a fortune of more than 1.3 million euros pay a separate tax. Most often, a luxury tax is levied on real estate. For this reason, many owners of large objects are trying to show that real estate is rented or used in professional activities.
About declaration
Each citizen and resident of the country is required to fill out this document. For beginners, it will be easier if the first time shows how to fill out a declaration, a professional. Such a person can not only correctly execute the document, but also suggest options for reducing payments.
All subsequent years from the tax will come an already completed form, in which a person will only have to make edits.
The completed tax return is submitted to the tax authority both by mail and in person. Be sure to comply with the deadlines.
It is important to understand that the terms change almost every year, so you need to follow this. After the declaration has been handed over, a person will receive a letter in which the final tax amount will be indicated.
If for some reason you do not need to pay tax, then the notification still arrives.
Responsibility for non-payment
Although France has a fair tax system, it does not exempt citizens from paying. Moreover, the punishment for tax evasion in French law provides for severe.
If a person made inaccuracies when filling out the declaration or missed the deadline, then a fine of 10% of the tax amount is imposed on him.
In situations where a person does not knowingly pay taxes, he can be seriously punished, including prosecution.
How to legally reduce tax
No matter how conscious the French citizens are, they are still looking for ways to reduce the tax, but, unlike the Russians, they want to do it legally. And such methods actually exist. So, a citizen who has just married can pay tax on only half of the amount of income. This rule only works when the wife is a housewife.
Tax payments are reduced if a person has children. Each child who appears in the family reduces the tax by some amount. Also, the costs of studying at a university or school are not taxed.
If children financially help their parents, then this amount is also not taxed. But for this rule to work, certain documents must be presented.
Important Nuances
Russians who leave to live in France are often worried that they will have to pay taxes in both countries. This kind of concern is in vain, because there is an agreement between the French Republic and our country that avoids double taxation.
Pension payments
If everything is clear with income tax, then it's time to talk about the pension payments of French citizens.
State social insurance in France is divided into two levels:
- ARRCO. The structure covers all people working professions. In this situation, 4% of the payroll is paid directly by employers, and 2% is paid by employees from their salaries.
- AGIRC. In this case, we are talking about all the managers and employees who are in leadership positions. The scheme works the same, only the numbers change: 8% is paid by employers and 4% by employees.
It is important to understand that in France taxes on payments to state pension insurance funds are considered only part of the payments that people are required to pay from their salaries for future retirement. As a rule, the French pension is formed due to additional payments to non-state pension funds. 20 50% .
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Health insurance
Another burning topic is medical care. Soviet people are used to the fact that they don’t take money for medical care. In France, citizens themselves provide quality medical care. Tax payments in this direction are divided into three groups:
- Regime general d`assurance maladie. This category covers 80% of the country's population.
- Insurance of various professional groups in certain areas. A striking example is the insurance of civil servants associated with the rural industry, or self-employed.
- Insurance for some professional groups. This includes miners, doctors, railway workers, sailors and more.
How much will be paid for health insurance depends on how much a person earns, what profession he has, his family status. The amount of payment is also affected by the hazard category of the profession. Moreover, health insurance extends to children under twenty years of age, spouse, close relatives. The rule works only if the economy of these people with the payer is common.
Unemployment
The state unemployment insurance system is not based on state guarantees, but on collective agreements of employing companies and employees. Payments are monitored by several entities:
- UNEDIC. The structure is responsible for the management and control of the state unemployment insurance system, as well as for some financial matters. The organization is also responsible for the rehabilitation and retraining of workers.
- POLE-EMPLO. The area of responsibility of this structure is the management of insurance accounts and payments on them. The same organization helps to find work and provides unemployment benefits. By the way, the structure was formed in 2009.