Filing a tax return is a legal obligation for every person resident in France for tax purposes, whether of French or foreign nationality. However, in practice, the tax situation of foreign nationals living in France may differ from that of French nationals. It varies according to their residence status and their sources of income. In this article, we will look at the taxable income of foreign nationals who are tax residents in France, and the procedure to follow in order to declare it.
The difference between a tax resident and a non-resident
Before looking at the taxes paid by a foreign national living in France, it is important to distinguish between a tax resident and a tax non-resident. The French tax system does indeed draw a distinction between these two types of status.
Although every foreign national living in France is required to declare their income, tax domicile plays a role in determining the type of income to be declared and the tax scales applied. To obtain tax resident status, a foreign national living in France must be in one of the following situations: - Their main residence and/or family is located in France; - They work in France; - Most of their income or assets come from France. The French tax resident must then declare all their income (professional, financial, and real estate where the threshold for the real estate wealth tax (impôt sur la fortune immobilière, IFI) is exceeded), whether it comes from France and/or from abroad. The tax non-resident, on the other hand, must declare only French-source income or real estate located in France.
What income must a foreign national living in France declare?
A foreign national living in France must pay various types of taxes. These include, in particular, income tax. This is one of the main taxes. It covers income from salaries, social security daily allowances, unemployment benefits, and income from self-employed professions (craftsmen, traders, liberal professions, etc.). Other income must also be declared, in particular pensions and retirement benefits paid by French bodies, investment or savings income, and rental income. In addition to income tax, foreign nationals must also pay local taxes such as housing tax (taxe d’habitation) for second homes and property tax (taxe foncière) for owners of real estate. Furthermore, foreign nationals whose net real estate assets exceed €1.3 million must also pay the real estate wealth tax (IFI). As mentioned above, foreign nationals with tax resident status in France must declare their French and foreign income. This applies to income tax, real estate income and savings income alike. The same applies to IFI: both French and foreign assets must be declared.
Tax non-residents, on the other hand, need only declare French-source income.
The tax return must be filed online or on paper after obtaining a tax number (the main return is form 2042). For income from abroad, form 2047 is used.
