FAQs

What type of tax is subject to the acquisition of a property in France?

As a rule, it is subject to the property tax , which is normally payable by the purchaser and payable by the notary at the Land Registry. However, the transaction may also cause the value-added tax at the standard rate of 20%, for example, if the property was completed in less than five years.

When are foreign taxpayers subject to private French wealth tax (ISF)?

This is the case when the net market value of their real estate assets located in France (including shares in real estate companies) exceeds a certain threshold (€ 1.3 million in 2014). The rapid rise of the property market in the last ten years (more than 80% increase) has meant that the number of ISF requirement has increased considerably.

Other taxes are collected?

The ownership of a French property triggers a series duties such as local property taxes (“taxe foncière” and “Taxe d’habitation”), which are collected annually by the municipalities and departments. The relevant tax rates are set at the local level.

Is there a tax deduction for the acquisition of French company vehicles?

No. This includes all vehicles other than passenger transport companies (eg taxi or bus companies) are concerned, which are designed for passenger transport. The deduction is also not permitted Replacement and individual parts and repair services and lead-free gasoline costs incurred for the vehicle. But the pilot is deductible to 80% for diesel fuel costs.

How is the tax deduction for the business use of private vehicles regulated?

To compensate for the operational use of the private car, a mileage allowance will be provided. As far as the annual custom of the financial management benchmarks are met, the amounts paid are tax deductible.

What benefits are there for “Young Innovative Company” of corporate tax?

The status of a “Jeune Entreprise Innovante” (JEI) is small or medium-sized enterprises irrespective of their legal form, have been established less than 8 years and that have expenditures for research and development purposes at least 15% of their total expenses. The condition is that the shareholders natural persons or other JEI are majority and that it is an innovative activity at the company’s business.
Undertakings to which the status of JEI is granted, shall be exempt for one year and completely for the following year to 50% of the corporation. The tax treatment shall be maximum amount to 200,000 €.

What are the regulations for income tax for micro enterprises?

In qualifying as micro enterprises (“Microentreprises”) cannot derive certain benefits and simplifications.
For service companies with an annual turnover exc. VAT under € 32,900 applies for calculating the tax base of income tax at a flat discount of max. 71% of annual sales.

What is the tax rate for the annual solidarity levy and which companies are affected?

Taxpayers are companies whose annual turnover is at least € 760,000.00. The tax rate for the annual solidarity contribution is 0.16% of the previous year’s sales excluding VAT.

What services are subject to VAT in France?

The field of application of VAT is very wide. It concerns, in principle, all pecuniary supplies of goods or services. The VAT of certain goods and services are exempt by law. In addition, there are extensive exemptions of the supply of goods and services that are actually not subject to VAT but the VAT may be subjected.

When is the VAT (TVA) to pay?

VAT is charged with simultaneous delivery of the VAT return every month. With a value added tax of less than 4000 €, the VAT return only required quarterly.

We calculated the income tax (IR)?

The respective income tax payable is calculated using a stage model. For married couples with or without children, first the taxpayer of a family, the number of shares (“Part”) is calculated. Each spouse represents a “part”. The first two dependent children each corresponding to an additional half part and each additional child a “part”. A family with three children thus corresponds to 4 (= 1 + 1 + 0.5 + 0.5 + 1) “Parts”. The total taxable income of the family is then divided by the sum of the “parts”.

Which tax allowances and discounts are available from income tax?

The standard deduction for advertising costs (wage and salary earners): 10%, max. € 12,097.
The standard deduction on pension: 10%, max. € 3,689.
Specific standard allowance for income from renting and leasing is 10% to 70%, however this is also depending on the location and condition of the property.

What facts can lead to tax deductions?

Alimony, social security contributions and solidarity surcharge (CSG / CRDS), expenditure on supplementary pensions.

When must I pay wealth tax (ISF)?

The property tax is basically to be provided on the grounds of self declaration and payment before June 15 of each year, or before July 15 for most taxpayers abroad. The submission of a separate property tax statement applies only to taxpayers with taxable assets over € 2.57 million. The other taxpayers declare their assets amount in their income tax return.

What should I consider when purchasing a property in France?

Most investors should analyze the tax consequences and the associated financial risks in advance of a real estate investment. The mere ownership of a French property, even if it is only for private use without speculative intentions, can already cause a variety of tax obligations, such as the property tax, the in France, compared to most other European countries they now have abolished, certainly some time is still being held.

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