In France, all tax residents, whether of French or foreign nationality, must file an income tax return every year. This return is compulsory, even for students or for people without a job. It allows the tax authorities to ensure that everyone is up to date with their tax obligations.
But how does the first tax return in France work? We explain everything.
Who Is Required to File a Tax Return in France?
To put it simply, nationality has no impact on tax obligations. No distinction is made between a French national, a foreign national holding a residence permit, an undocumented foreign national or a foreign student. The only difference lies in tax domicile. Non-residents and residents for tax purposes are not subject to the same obligations or to the same tax scales.
To be considered a tax resident, you must meet at least one of the following conditions: - Your main home is in France; - France is the main location of your economic interests; - You carry out your main professional activity in France; - France is your principal place of stay (in practice, more than half the year)
What Taxes Must a Foreign National Pay in France?
As a tax resident of France, whether you are French or a foreign national, European or not, you must pay taxes in France.
These taxes can take several forms, such as: - Income tax: if you are a tax resident of France, you must declare all the income you receive in France and abroad. If you are not a tax resident of France, you must only declare income from French sources. The income to be included in the annual return includes, in particular, income from your salaries, your daily social security benefits, your unemployment benefits and your self-employment income. Pensions and retirement benefits paid by French bodies, investment or savings income and rental income must also be declared. - Local taxes: foreign nationals, whether tax residents or not, must also pay the housing tax (taxe d'habitation) on second homes if they have a second home in France. Property owners must also pay the property tax (taxe foncière). - The real estate wealth tax (impôt sur la fortune immobilière) (IFI): IFI must be paid by all tax residents of France whose net real estate assets exceed 1.3 million euros: the assets include properties located in France and abroad. For non-residents, only properties located in France are taken into account.
How to File Your First Tax Return?
To file a first tax return in France, you must obtain a tax identification number. To do so, you need to contact the tax office for your place of residence. Once you have obtained your tax identification number, you will be able to declare your income using form 2042 or 2042 C, for income tax. This return can be filed on paper or online. To do so, you need to ask your tax office to create an account for you on the tax website so that you can complete the annual return. Income tax returns are filed in April/May, and are used to declare the income of year N-1.
