French Tax Rates 2020

Written by on December 4, 2019 in News

A summary of French tax rates 2020, based on the budget proposals, though there may be amendments by the end of December.

Reduced tax rate for lower income in France for 2020

The main change is a reduction in the income tax rates for calendar year 2020. With the inntroduction of a PAYE (pay as you earn) system – the 2020 budget includes the income tax bands and rates for both 2019 and 2020.

French Income Tax rates for 2019

Tax rates remain the same as last year, but bands have been indexed for inflation.

Up to €9,964:  Nil
€9,964 to €27,794: 14%
€27,794 to €74,517: 30%
€74,517 to €157,806: 41%
Over €157,806: 45%

French Income Tax rates for 2020

The starting tax rate is reduced from 14% to 11%: This will save taxpayers in this bracket around €350 per year. On the other hand, the 30% rate now starts at €25,405 instead of €27,794.

Up to €9,964: Nil
€9,964 to €25,405: 11%
€25,405 to €72,643: 30%
€72,643 to €156,244: 41%
Over €156,244: 45%

Flat tax on investment income in France

The tax rate for investment income remains unchanged at 30% (inc. social charges) for 2020 income.

French social charges

No changes were announced for social charges, so it looks like they will remain as:

9.7% for employment/self-employment income
9.1% for pension income
17.2% for investment income including rental income.

Tax on Assurance-Vies in France

The initial budget draft did not include any reforms for the taxation of an Assurance Vie. Four early amendments which would have introduced significant changes were proposed but then rejected. The fourth was debated but it looks like it was also rejected, so hopefully we will not see any changes to Assurance-Vies in 2020.

Real Estate Wealth tax and Succession Tax in France

The current threshold of €1,300,000 for the ‘IFI’ real estate wealth tax will stay in place for 2020, with no changes to the scale rates of tax. The 75% limitation also remains unchanged.

The budget did not include any reforms for Succession Tax rates and allowances.

Taxe d’habitation

The changes to this local residence tax, announced in 2017, continue to remove households from Taxe d’habitation. While some already escape this tax, the number increases so that next year only 20% will have to pay it. By 2023 it will be completely abolished.

Corporation tax in France

The main rate of corporation tax remains at 31%, but it is reduced to 28% for companies with turnovers under €250 million.

Written by Paul Flintham, International Financial Adviser, Beacon Global Wealth Management; Emailpaul @ bgwealthmanagement.net; beaconglobalwealth.com

The information on this page is intended only as an introduction only and is not designed to offer solutions or advice. Beacon Global Wealth Management can accept no responsibility whatsoever for losses incurred by acting on the information on this page.
The financial advisers trading under Beacon Global Wealth Management are members of Nexus Global (IFA Network). Nexus Global is a division within Blacktower Financial Management (International) Limited (BFMI). All approved individual members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission and bound by their rules and bound by their rules under licence numbers (IDD) FSC00805B and (MIFID) FSC1122MIF.

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