EY Societe d’Avocats Tour First 1, Place des Saisons
TSA 14444
92037 Paris-La Défense Cedex France
Executive contacts
Emmanuel Morisson-Couderc
+33 (1) 55-61-13-69
Fax: +33 (1) 58-47-70-37 Email: emmanuel.morisson-couderc @ey-avocats.com
Bernard Oury
+33 (1) 55-61-17-44
Fax: +33 (1) 58-47-70-38 Email: bernard.oury@ey-avocats.com
Colin Bernier +33 (1) 55-61-12-41
Fax: +33 (1) 58-47-21-61 Email: colin.bernier@ey-avocats.com
Charles Andre, +33 (2) 51-17-50-62
Main contact for regional offices Fax: +33 (1) 58-47-71-07 (resident in Nantes) Email: charles.andre@ey-avocats.com
Xavier Delaunay
+33 (1) 55-61-17-77
Fax: + 33 (1) 58-47-22-35 Email: xavier.delaunay@ey-avocats.com
Stanislas Dujardin +33 (1) 55-61-17-46 Email: stanislas.dujardin@ey-avocats.com Antoine Vigneras de Bourdeau +33 (3) 28-04-36-99 Email: antoine.vigneras@ey-avocats.com
Immigration contact
Sylvain Garguilo
A. Income tax
+33 (1) 55-61-11-26 Email: sylvain.garguilo@ey-avocats.com
Who is liable. Individual income taxation is based on residence. Taxpayers are categorized as residents or nonresidents. Treaty rules on tax residence override domestic rules.
Residents. Persons of French or foreign nationality are considered residents for tax purposes if their home, principal place of abode, professional activity or center of economic interest is located in France. As a resident, an individual is taxed on worldwide income, subject to applicable treaty exemptions.
Nonresidents. Persons not considered resident as defined above are taxed on French-source income only.
Expatriate tax law. A favorable expatriate tax law applies to employees seconded to France after 1 January 2004. This favor able tax regime (Article 81 B of the French tax code) provides that under certain conditions, expatriates seconded to France after 1 January 2004 may not be taxed on compensation items relating to the assignment in France, such as a cost-of-living allowance, housing cost reimbursement and tax equalization
payments. The main condition is that the taxpayer must not have been considered a tax resident of France in any of the five tax years preceding his or her year of arrival in France. In addition, up to 20% of the remaining taxable compensation can poten tially be excluded if the expatriate performs services outside of France during his or her assignment (non-French workdays). The exemptions are available until 31 December of the fifth year fol lowing the year of transfer to France. Administrative regulations on the law, which were released in 2005, provide that the exemptions in the law may not be combined with the benefits under the French headquarters rules (see Expatriate French headquarters and distribution center employees).
Effective from 1 January 2008, the favorable tax regime described above (now Article 155 B) was extended to local hires (including French nationals) who relocate to France and meet the above residency criteria. Under the Impatriate Tax Regime (Régime fiscal des impatriés), employees hired directly by a French com pany (excluding intra-company transfers) may elect to have 30% of their net remuneration treated as an impatriate premium and thereby exempted from French income tax up to the limit of the French reference net taxable salary (compensation received by other employees with respect to equivalent positions).
Taxpayers who satisfy the Article 155 B conditions benefit from a 50% tax exemption with respect to their foreign-source dividends, interest, royalties and capital gains (resulting from sale of securities) for a period of five years (subject to certain conditions concerning the source of such income). Social surtaxes of 17.2% remain payable on the full income.
The option for the 30% impatriate premium, which was previ ously reserved for individuals hired directly abroad by a company established in France, has been extended to the following:
• Individuals called by a foreign company to a company in France
• Intra-company transfers
This provision applies to individuals taking up their duties in France on or after 16 November 2018.
The period of the application for the favorable tax regime is extended to 31 December of the eighth year following the year of transfer to France for taxpayers who transferred to France on or after 6 July 2016.
Expatriate French headquarters and distribution center employees. A foreign expatriate assigned to the French headquarters (HQ) of a multinational company may be eligible under a HQ ruling for tax relief for up to six years from the assignment date. The principal advantage of a HQ ruling is the elimination of tax-ontax if the employer reimburses an expatriate for his or her excess foreign tax liability. This tax reimbursement is taxed only at the cor porate rates and is not grossed up. With careful planning, exemption from personal income tax on many benefits and allowances may be obtained. The new expatriate tax law is generally more favorable than the HQ rules and an election must be made as to which of the two regimes applies to the expatriates of a HQ.
Taxable income. Taxable income consists of annual disposable income from all sources. Income is identified based on its nature, and then allowances, deductions and treaty provisions are applied in calculating net taxable income subject to progressive tax rates.
The taxation of each category of income may be modified by an applicable treaty provision. For example, US citizens are not taxed on US-source passive income (however, see Effective rate rule).
Taxable salary income. The total of all compensation paid by an employer is considered taxable salary income and includes such items as the private-use element of a company car, employer-paid meals and employer-paid education expenses for employees and their dependent children. Taxable compensation does not include the following items paid by employers: certain pension contribu tions, certain medical insurance premiums and, for resident for eigners and nonresidents, home-leave expenses, moving expenses and temporary housing expenses.
Self-employment and business income. Self-employment income is divided into the following three categories, depending on the nature of the activities: commercial (includes trades), profes sional and agricultural.
Taxable income realized from each category is subject to the progressive tax rates that apply to resident individuals (see Rates). In addition, a self-employed individual is subject to a flat social tax (see CSG/CRDS and social tax).
Self-employed individuals involved in commercial activities are required to use the accrual method of accounting and must include in taxable income all receipts, advances, expense reim bursements and interest directly related to the activities. Long-term capital gains from disposals of a company’s assets benefit from a special measure, which provides for gains to be taxed at a rate of 12.8%, with an additional 17.2% (9.7% for contribution sociale généralisée [CSG]/contribution reimboursement de la dette sociale [CRDS] and 7.5% additional social tax) charged on pas sive income and capital gains (see Rates).
Taxable income for professional activities is equal to the differ ence between receipts and expenses actually received or paid in the calendar year. This use of the cash-basis method of accounting (though optional) constitutes the principal difference between the taxation of commercial and professional activities. Detailed daily records must be maintained by self-employed persons. Longterm capital gains from disposals of assets used in professional activities are taxable at a rate of 12.8%, with an additional 17.2% for CSG/CRDS and additional social tax charged on passive income and capital gains.
Profits derived from agricultural cultivation and breeding consti tute taxable income, which is determined by using the cash method of accounting. Because of the variability of farm income, special tax rules apply. In general, long-term gains from dispos als of assets used in agricultural activities are taxable at a rate of 12.8%, with additional social taxes of 17.2%. However, specific rules apply in certain cases.
Directors’ fees. Under French internal law, directors’ fees are treated as dividend income. Similarly, because directors’ fees are not considered salary, the 10% standard deduction does not apply. Directors’ fees paid to nonresidents are generally subject to a flat 12.8% withholding tax, unless a tax treaty provision reduces or eliminates the tax.
Investment income. Interest and dividends are taxed at a flat rate of 30% (12.8% income tax and additional social charges of 17.2%). However, taxpayers can elect to be taxed on such income under regular progressive rates if more favorable. See Expatriate tax law for information regarding taxpayers qualifying under Article 155 B.
Net income derived from the rental of real estate and from royalty income (other than for industrial property) is taxed as ordinary income. Royalties from industrial property are taxed at a rate of 33.33%, subject to a possible reduced rate provided in a tax treaty. Income from real estate is subject to income tax plus 17.2% CSG/ CRDS and social tax.
Exempt income. Exempt income includes the following:
• Certain profits from the sale of securities
• Family allowances and health care reimbursements
• Payments received pursuant to life insurance contracts (under certain conditions)
Employment income earned by a tax resident of France with respect to employment duties performed outside France for an employer established in France, a European Union (EU) member state or a member state of the European Economic Area (EEA) that has concluded with France a tax treaty containing an admin istrative cooperation clause is exempt if one of the following conditions is satisfied:
• For more than 120 days during a 12-month period, the employ ee is engaged outside France in prospecting for new clients for his or her employer.
• The employee establishes that his or her salary is subject to a foreign income tax equal to at least two-thirds of the equivalent French tax.
• For more than 183 days in a 12-month period, the employee performs employment duties overseas in connection with construction, engineering, or exploration or extraction of a natural resource.
Supplemental amounts, contractual premiums or per diems earned for foreign duty by such residents may be exempt from tax under certain conditions, depending on the number of foreign workdays. This exemption is limited to a maximum of 40% of the annual remuneration. Special exemptions and rules apply for small businesses engaged in commercial, professional and agricultural activities and in certain other circumstances.
Taxation of employer-provided stock options. Exercise gains real ized on stock options are subject to full ordinary income tax and employee and employer social security contributions as employ ment income if either the following circumstances exists:
• The stock options are from nonqualified plans.
• The stock options are from qualified plans, and the reporting requirements are not satisfied.
Stock option plans that qualify under French corporate law ben efit from a favorable tax regime. Foreign plans may be amended to qualify under the French rules.
No taxes or social security contributions are levied when the option is granted. At the time of exercise, taxes and social secu rity contributions are not levied unless the option exercise price is less than 95% of the average stock price over the 20 trading days preceding the grant date.
An employer contribution is due on the grant of options awarded under a French qualified plan. This contribution equals 30% of the fair market value (FMV) of the option as determined for accounting purposes (International Financial Reporting Standard [IFRS] 2) or 30% of 25% of the value of the shares underlying the options. Employees are also subject to a specific contribution at the date of sale of the shares acquired through the exercise of an option granted under a French qualified plan. This contribu tion applies to options granted on or after 16 October 2007 and equals 10% of the exercise gain (difference between the FMV of the shares on exercise and the amount paid to exercise the options).
When stock acquired under a qualified plan is sold, the gains benefit from favorable tax treatment if both of the following requirements are met:
• The shares are kept in nominative form.
• The employer and the employee satisfy specific reporting requirements at the time of exercise of the option.
Gains derived from the sale of stock acquired under French qualified options granted on or after 27 April 2000 and before 28 September 2012 are taxed in accordance with the following rules:
• If the stock has not been held for at least two years after exer cise, the spread (the difference between the FMV of the stock at exercise and the strike price) is subject to tax at a 47.2% flat rate (including 17.2% of social taxes) on the amount of the spread up to EUR152,500, and at a 58.2% flat rate (including 17.2% of social taxes) on the excess.
• If the stocks are sold more than six years after grant of the options and more than two years after exercise of the option, the spread is subject to tax at a 35.2% flat rate (including 17.2% of social taxes) on the amount of the spread up to EUR152,500, and at a 47.2% flat rate (including 17.2% of social taxes) on the excess.
Alternatively, the employee may elect to have the exercise gain taxed at the regular progressive tax rates (plus 17.2% of social taxes) if this is more advantageous.
As discussed above, for options granted on or after 16 October 2007, an additional employee social contribution of 10% must be paid.
For gains derived from the sale of stock acquired under French qualified options granted on or after 28 September 2012, the spread is subject to the following:
• Income tax at the regular progressive rates
• 9.7% CSG/CRDS and the 10% employee social contribution described above
Gains derived from French qualified options granted before 27 April 2000 are subject to specific tax rates.
Any additional capital gain resulting from the difference between the sale price and the FMV of the shares on the date of exercise is taxed as described below in Capital gains.
Taxation of restricted stock awards. Vesting gains realized on restricted stock awards from nonqualified plans are considered employment income and are subject to full ordinary income tax and employee and employer social security contributions at the time of vesting.
Restricted stock awards may be subject to favorable tax and social security treatment. To qualify, the company’s plan must meet specific rules, which include minimum vesting and holding periods, the length of which depends on the date of grant of the awards or the date of the decision of the shareholders authorizing the implementation of a restricted stock plan.
If the plan qualifies for French purposes and the vesting and holding period conditions are satisfied, the income tax charge is deferred until the date of the sale of the shares, and no social security tax is due with respect to the value of the stock award.
For restricted stocks granted under an authorization given by the shareholders after 8 August 2015, the tax law reduces the dura tion of the minimum vesting and holding periods. Under the new law, the acquisition period cannot be lower than one year and the aggregated period of the vesting and holding periods cannot be lower than two years. If a vesting period of at least two years is implemented, no legal or tax obligation to impose a holding period applies.
An employer contribution is due at the date of the award of restricted stocks under a French qualified plan if the implementa tion was authorized by the shareholders before 8 August 2015. This contribution equals 30% of the FMV of the shares awarded as determined for accounting purposes (IFRS 2) or 30% of the value of the shares on the date of the award. The employer freely determines the method and can choose the method that results in the lowest valuation.
For restricted stocks granted under an authorization given by the shareholders on or after 8 August 2015 and on or before 31 December 2016, the employer contribution is due at the date the shares are delivered to the employee. This contribution is due at a rate of 20% and is assessed on the FMV of the shares on the vesting date. For restricted stocks granted under an authorization given by the shareholders after 31 December 2016 and on or before 31 December 2017, the employer contribution is due at a rate of 30%. For restricted stocks granted under an authorization given by the shareholders on or after 1 January 2018, the employ er contribution is due at a rate of 20%.
Employees are subject to an additional contribution at the date of sale of the shares acquired under a French qualified plan. This contribution applies to shares granted on or after 16 October 2007 and equals 10% (rate applicable for shares sold since 18 August 2012) of the FMV of the shares on the date of delivery. This 10% employee contribution has been removed for restricted
stocks granted under an authorization given by the shareholders after 8 August 2015. However, it has been partly reinstated for restricted stocks granted under an authorization given by the shareholders after 31 December 2016 (see below).
Gains derived from the sale of shares awarded under French qualified restricted stock plans that were granted before 28 September 2012 are taxed in accordance with the following rules:
• Taxable income equals the FMV of the shares at the date of vesting and is subject to tax only at the date of sale. It is subject to income tax at a flat 30% rate, plus 17.2% of social taxes and the 10% employee social contribution described above.
• If more favorable, the taxpayer can elect to have the stock award taxed at the regular progressive rates of income tax, plus the 17.2% of social taxes and 10% employee social contribution described above.
For gains derived from the sale of shares awarded under French qualified restricted stock plans that are granted on or after 28 September 2012 (under an authorization given by the share holders before 8 August 2015), the acquisition gain (FMV of the shares on the date of delivery) is subject to the following:
• Income tax at the regular progressive rates
• 9.7% CSG/CRDS and the 10% employee social contribution described above
For gains realized under French qualified restricted stock plans for which implementation was authorized by the shareholders on or after 8 August 2015 and on or before 31 December 2016, the vesting gain (FMV of the shares on the date of delivery) is taxed at the date of sale of the shares in accordance with the following rules:
• Income tax is imposed at the regular progressive rates with application of a reduction of the tax base of 50% if the shares are held for more than two years after the vesting date. The reduction of the tax base is increased to 65% if the shares are held for more than eight years after the vesting date.
• 17.2% social taxes are imposed on investment income (calcu lated on the amount before any reduction of the tax base).
For gains realized under French qualified restricted stock plans for which implementation was authorized by the shareholders after 31 December 2016 and on or before 31 December 2017, the vesting gain (FMV of the shares on the date of delivery) is taxed at the date of sale of the shares in accordance with the following rules:
• Portion of the annual gain below EUR300,000: Income tax is imposed at the regular progressive rates with application of a reduction of the tax base of 50% if the shares are held for more than two years after the vesting date. The reduction of the tax base is increased to 65% if the shares are held for more than eight years after the vesting date. On investment income, 17.2% social taxes are imposed (calculated on the amount before any reduction of the tax base).
• Portion of the annual gain above EUR300,000: Income tax at the regular progressive rates is imposed. The 9.7% CSG/CRDS and the 10% employee social contribution described above is imposed.
For gains realized under French qualified restricted stock plans for which implementation was authorized by the shareholders on or after 1 January 2018, the vesting gain (FMV of the shares on the date of delivery) is taxed at the date of sale of the shares in accordance with the following rules:
• Portion of the annual gain below EUR300,000: Income tax is imposed at the regular progressive rates with application of an automatic reduction of the tax base of 50%. 17.2% social taxes are imposed (calculated on the amount before any reduction of the tax base).
• Portion of the annual gain above EUR300,000: Income tax at the regular progressive rates is imposed. The 9.7% CSG/CRDS and the 10% employee social contribution described above is imposed.
Any additional capital gain resulting from the difference between the sale price and the FMV at vesting is taxed as described below in Capital gains.
Withholding obligation on French-source portion of French qualified gains realized by nonresident taxpayers. Under Article 182 A of the French Tax Code, the French income tax due on the Frenchsource portion of qualified stock options or qualified restricted stock award gains realized by individuals who are not tax resi dents in France at the time of the taxable event (that is, the sale of the underlying shares) must be withheld by the entity that pays the cash proceeds from the sale of the shares. The income tax must be withheld at the flat rate applicable to the qualified stock options or qualified restricted stock award gains (18%, 30% or 41% for gains realized in 2021), or at the specific progressive withholding tax rates applicable to compensation income. This obligation applies at the date of sale of the underlying shares and concerns restricted stock vested and options exercised since 1 April 2011.
Capital gains. Capital gains derived from the disposal of share holdings and real estate are subject to tax in France.
Investments. Capital gains realized by a taxable household on the sale of listed or unlisted shares, bonds or related funds are taxed at a flat rate of 30% (12.8% income tax and 17.2% of CSG/ CRDS and additional social charges). In some cases, taxpayers can elect to be taxed at progressive tax rates with a discount based on the holding period if more favorable. See Expatriate tax law for information regarding taxpayers qualifying under Article 155 B.
Real property and shares in real estate companies. Gains derived from the sale of real property are taxable at a rate of 19%, and are subject to CSG/CRDS and social tax (17.2%), resulting in a com bined total tax rate of 36.2%. Gains are reduced for each year that the property is held, effective from the fifth year of ownership (no chargeable gain arises with respect to property owned for 22 years or more for income tax and no charge for CSG/CRDS and social taxes applies after 30 years of ownership). The purchase price is increased to take into account purchase expenses and capital improvements. Effective from 1 January 2013, supplementary tax rates apply to capital gains in excess of EUR50,000. These supple mentary tax rates range from 2% to 6%.
Exemptions. Individuals may benefit from a total exemption for gains derived from the sale of a principal private residence.
Deductions and credits
Deductible expenses. Expenses incurred in earning or realizing income are generally deductible from such income, and credits may also be available. The following deductions and credits are specifically allowed:
• Taxpayers may either deduct 10% of net taxable employment income, limited to EUR12,652 (for 2020 employment income), as an allowance for unreimbursed business expenses, without providing proof of expenditure, or they may elect to deduct actual expenses and provide a detailed listing.
• Tax credits are granted for investment in specified historical or classified real estate, for investment incurred for rental purposes and for domestic employee expenses up to a maximum of EUR12,000 (2020 ceiling) plus EUR1,500 per dependent. The credits cannot exceed EUR15,000.
• A credit is available for qualifying childcare expenses (outside the home) equal to 50% of the amount paid, limited to EUR2,300 per child under the age of six.
• Tax credits are granted, within certain limits, for charitable donations to recognized charitable institutions.
• School credits are available in the amount of EUR61 for a child in a college, EUR153 for a child in a lycée and EUR183 for a child in higher education.
• Amounts paid for alimony and child support (limited for chil dren over 18 years of age) and for limited dependent parent sup port are deductible.
• A tax credit is available for investments in the motion picture and fishing industries and for certain other investments.
Numerous other allowances and deductions may also be available.
Personal deductions and allowances. The family coefficient rules discussed in Rates are used in calculating tax at progressive rates and take into account the size and taxpaying capacity of the household.
Business deductions. In general, deductible expenses for com mercial, professional and agricultural activities are similar. They include the following items:
• The cost of materials and stock
• General expenses of a business nature, including personnel expenses, certain taxes, rental and leasing expenses, finance charges and self-employed persons’ social security taxes
• Depreciation expenses (two methods are applicable, straight-line and declining-balance, over the normal life of the asset)
• Provisions for losses and expenses if the accrual method of accounting is used
Rates. French individual income tax is levied at progressive rates, with a maximum rate of 45% for the 2020 tax year (these are the most recent rates available). Family coefficient rules are used to combine the progressive tax rate with the taxpaying capacity of the household. France has a regime of joint taxation for married couples and individuals who have contracted a civil union (Pacte Civil de Solidarité, or PACS). Income tax is assessed on the
combined income of the members of the household, including dependents. No option to file separately is available.
Family coefficient system. Under the family coefficient system, the income brackets to which the tax rates apply are deter mined by dividing taxable income by the number of allowances available to an individual. The final tax liability is then calculated by multiplying the tax computed for one allowance by the num ber of allowances claimed. Available allowances are shown in the following table.
Family composition Allowances
Single individual
Married couple
No children
child
children
Each additional dependent child
Limits are imposed on the tax savings resulting from the applica tion of the family coefficient system. For example, for a married couple, for the 2020 tax year, the tax savings may not exceed EUR1,570 for each additional half allowance claimed.
The progressive tax rates take into account the family coefficient.
The following table provides the 2020 income tax brackets and rates for individuals.
Annual taxable income Tax Exceeding Not exceeding rate EUR EUR % 0 10,084 0 10,084 25,710 11 25,710 73,516 30 73,516 158,122 41 158,122
45
Exceptional 3% and 4% tax on high income taxpayers. High income taxpayers are liable for an exceptional tax calculated on their gross reference taxable income. For single taxpayers, the rate is 3% for the portion of the gross reference taxable income between EUR250,000 and EUR500,000 and 4% for the portion exceeding EUR500,000. For married taxpayers, the rate is 3% for the portion of the gross reference taxable income between EUR500,000 and EUR1 million and 4% for the portion exceed ing EUR1 million. Gross reference taxable income equals taxable income plus exempt income, less limited items that are tax deductible.
CSG/CRDS and social tax. CSG/CRDS applies to all resident taxpayers. It is charged at a rate of 9.7% on 98.25% of gross sal ary if it does not exceed EUR164,544 (2021 ceiling) per year and on 100% of the portion of the gross salary that exceeds EUR164,544, including benefits in kind and bonuses.
CSG/CRDS on passive income and capital gains is increased by a social tax surcharge, resulting in a total rate of 17.2%. If the individual is not affiliated to the French mandatory social secu rity scheme and is affiliated to a mandatory social security
scheme located in the EU, Iceland, Liechtenstein, Norway or Switzerland, he or she is exempted from CSG/CRDS (9.7%) resulting in a total rate of 7.5%.
The tax administration characterizes CSG/CRDS as an income tax for domestic purposes. However, for social security bilateral agreements and EU social security regulation purposes, it is characterized as a social security charge. Consequently CSG/ CRDS is not payable on employment income for expatriates covered under a social security certificate of continued coverage. This exemption for employment income does not apply to taxable passive income, including taxable capital gains.
CSG is charged at a rate of 9.2%, of which 6.8% is deductible for French income tax purposes.
Nonresidents. Nonresidents are subject to a withholding tax on French-source remuneration, after the deduction of statutory employee social security contributions and the 10% standard deduction.
Withholding rates applicable to net French-source compensation received by nonresidents in 2021 are set forth in the following table.
Annual taxable income Tax Exceeding Not exceeding rate EUR EUR % 0 15,018* 0 15,018 43,563* 12 43,563 20
* Tax brackets are prorated according to the time actually worked in France.
The withholding tax discharges the individual’s tax liability to the extent that the taxable amount does not exceed the 12% income bracket. Excess taxable income subject to the 20% bracket must be reported on an annual nonresident income tax return and is subject to the regular progressive tax rates. The 20% withholding then constitutes a tax credit against the tax liability. Any excess tax credit is not refundable.
A nonresident’s tax liability may not be less than 20% of net taxable income for income between EUR0 and EUR25,710 and 30% for income exceeding EUR25,710. However, if a nonresi dent can prove that the effective rate of tax computed on his or her worldwide income, according to French tax rules, is less than 20% or 30%, the progressive income tax rates apply with out limitation.
Effective rate rule (exemption with progression). If an individual has income exempt from tax under treaty provisions, the effective rate rule generally applies. Under this rule, the taxpayer’s income tax liability is calculated based on worldwide income using the progressive rates and other French tax rules. Total income tax is then divided by worldwide income to yield the effective percent age rate, which is then applied to income taxable in France to determine total tax payable in France.
Relief for losses. French taxable income is determined for each category of revenue. Expenses incurred in creating income are
deductible from the income produced. The following are deduct ible losses:
• Certain rental losses not due to interest payments, up to EUR10,700 per tax household per year
• Certain professional losses
The general principle is that losses from one category of income may offset profit from other categories and may be carried forward for six years. However, this principle is subject to limitations. Certain losses may be offset only against income from the same category of income. These include capital losses on quoted stocks and bonds.
Capital losses from the disposal of real estate are final losses and may not be carried forward to offset future capital gains from real estate.
B. Other taxes
Real estate wealth tax. Effective from 1 January 2018, the real estate wealth tax replaced the wealth tax.
The real estate wealth tax is levied on individuals with total net real estate assets exceeding EUR1,300,000 as of 1 January.
Real estate wealth tax applies to all real estate assets and real estate rights as well as to the shares in companies or other orga nizations for the fraction of the assets that represent real estate or real estate rights held directly or indirectly.
The following are the progressive rates of real estate wealth tax.
Taxable wealth
Exceeding Not exceeding Rate EUR EUR % 0 800,000 0 800,000 1,300,000 0.5 1,300,000 2,570,000 0.7 2,570,000 5,000,000 1 5,000,000 10,000,000 1.25 10,000,000 — 1.5
A discount is planned for the taxable wealth included between EUR1,300,000 and EUR1,400,000.
French tax residents are taxed on their French and foreign real estate assets. Non-French tax residents are taxed on their French real estate assets only, subject to the application of tax treaties.
In addition, a specific exemption from real estate wealth tax on any assets located outside of France exists for individuals who move their residence from abroad to France and who have not been French tax residents during the preceding five civil years. This measure applies until 31 December of the fifth year follow ing the year of the transfer of the residence in France.
Real estate wealth tax due from a French tax resident can be capped if the total taxes due from the individual exceed 75% of his or her annual income of the preceding year.
French taxpayers liable for real estate wealth tax must indicate their net asset value on the 2042-IFI tax form filed with the an nual income tax return. The French tax administration calculates
the real estate wealth tax and the amount due must be paid after receipt of the real estate wealth tax assessment.
Debts relating to assets exempt from real estate wealth tax or not included in the real estate wealth tax base cannot be deducted in the calculation of the real estate wealth tax.
Specific deduction rules apply for the valuation of shares of a company owning real estate, notably in the case of in fine loans (loans for which the capital must be reimbursed at once at the end of the loan; that is, loans with maturity) and loans that have been concluded directly or indirectly between the company and the taxpayer or members of his or her family.
Exit tax. An exit tax on restricted categories of income (mainly capital gains) may apply to taxpayers who departed France on or after 3 March 2011 if they own more than 50% of the stocks of a company or have more than EUR800,000 in shares the day before breaking their French tax residency and if the taxpayer was a French resident for at least 6 years during the last 10 years. The exit tax on the unrealized capital gain calculated at the date of the tax residency transfer may be due or may be postponed with or without a financial guarantee, depending on the country to which the taxpayer transfers her or his tax residency. Effective from 1 January 2014, after the departure from France, the taxpayer must hold his or her shares for at least 15 years (for transfers of residence after 1 January 2019, the 15-year period is reduced to 2 years or 5 years if the shares value exceeds EUR2,570,000). If the taxpayer decides to sell his or her shares before the end of this period, the postponement of the taxation ends, and the taxpayer is taxable on the capital gains calculated at the departure. The taxpayer must comply with filing obligations, which differ de pending on the state and the date of the transfer.
Inheritance and gift taxes. If a decedent or donor was resident in France (or if the heir or beneficiary is French tax resident and was French tax resident during 6 years of the 10 past years), tax is payable on gifts and inheritances of worldwide net assets, unless otherwise provided by an applicable double tax treaty. For nonresident decedents or donors, only gifts and inheritances of French assets are taxable, provided the beneficiary is also a non resident of France, unless otherwise provided by an applicable double tax treaty.
Surviving partners (spouses or partners in a Civil Union [Pacte Civil de Solidarité, or PACS]) are exempt from inheritance tax. The allowance for parents and children amounts to EUR100,000. The excess is taxed at rates ranging from 5% to 45%, depending on the value of the inheritance. Surviving brothers and sisters may be exempt from inheritance tax if specific conditions are met. In the absence of these conditions, they may each claim a personal allowance of EUR15,932 and are taxed at a rate of 35% on inheritances of up to EUR24,430 and at a rate of 45% on the excess. Other close relatives are taxed at a rate of 55% on the excess over EUR1,594 (or EUR7,967 for nephews and nieces), and other persons at a rate of 60% on the excess over EUR1,594. The gift tax rates are generally the same as those for inheritance tax. Gifts between partners are taxable (spouses or partners in
PACS), but partners benefit from a personal allowance of EUR80,724 instead of an exemption. For grandchildren, the allowance is EUR31,865. The excess is taxed at rates ranging from 5% to 45%.
The following items are exempt from inheritance tax:
• Life insurance contracted by the deceased (subject to certain age conditions). This exemption is limited to EUR152,500 for each designated beneficiary (as an exception, full exemption for surviving partners), and the excess is taxed at rates of 20% and 31.25%.
• The transfer of companies by death or gift (Collective Holding Commitment [Pacte Dutriel]). The transfer is partially exempt from inheritance and gift tax (75% rebate) if specific conditions are met (in particular, commitment of the heirs or the donees to retain the shares of the company). A tax reduction of 50% may also apply to a gift of the company if the donor is less than 70 years old.
• Works of art, if offered to the state.
To provide relief from double inheritance taxes, France has entered into estate tax treaties with the following jurisdictions.
Algeria Germany Qatar Austria Guinea St. Pierre and Bahrain Italy Miquelon Belgium Kuwait Saudi Arabia Benin Lebanon Senegal Burkina Faso Mali Spain Cameroon Mauritania Sweden Canada Monaco Togo Central African Morocco Tunisia Republic New Caledonia United Arab Congo (Republic of) Niger Emirates
Côte d’Ivoire Oman United Kingdom Finland Portugal United States Gabon
Trusts. Assets held indirectly through trusts located abroad may result in wealth tax and inheritance tax. A trust is an unknown concept in French civil law. It was defined by the tax law in 2011 as legal rights created under foreign law by a settlor (constituent), either inter vivos or by death, who transfers assets to a trustee (administrateur) in the interests of beneficiaries. Since 2011, the French law provides specific rules for trusts located outside France.
Real estate wealth tax. Non-French tax residents who are true settlors of a trust (contributors to the trust and not acting for the account of others), or beneficiaries of a trust in the event of the settlor’s death, are liable to real estate wealth tax in France only on the basis of the immovable assets located in France. NonFrench tax residents must complete their real estate wealth tax returns. If they fail to meet these real estate wealth tax obliga tions, the trustee must pay a specific contribution, which equals the amount calculated by applying the marginal real estate wealth tax rate (1.5%) to all immovable assets located in France.
Reporting obligations. The trustee must disclose to the French tax administration some details about the trust (including but not limited to settlor identity, beneficiary identity, and nature and value of the asset) if the settlor or at least one of the beneficiaries is a French tax resident, if any asset held in the trust is located in France or if the trustee is a French tax resident. The trustee must file the following two kinds of tax returns:
• A tax return for each event occurring with respect to the trust (creation, modification, termination and distribution) within one month after the event
• An annual return detailing all the assets held by the trust and providing their FMV at 1 January
If the reporting obligations are not respected by the trust, a fine equal to EUR20,000 is imposed. Furthermore, an 80% penalty applies to the amount of the potential reassessments deriving from income in the trust (this 80% penalty cannot be less than EUR20,000; however, if the 80% penalty applies, the flat EUR20,000 fine does not apply).
Inheritance tax. The inheritance tax regime applicable to assets held through a trust is not favorable in comparison with the direct holding of the assets. However, if the assets are specially allo cated to the beneficiaries before the death of the settlor and if certain other requirements are satisfied, the assets could be sub ject to progressive inheritance tax rates in France as if they were held directly by the settlor. If these conditions are not satisfied, the assets are subject to a higher flat rate of 45% (60% if the assets are allocated to a third party).
Trust distribution. Distributions from the trust to a beneficiary may be subject to French taxes or treated as investment income.
C. Social security
Contributions. An individual’s social security taxes are withheld monthly by the employer. French social security contributions are due on compensation, including bonuses and benefits in kind, earned from performing an activity in France even if paid from a foreign country. However, this rule may be modified by a social security totalization agreement. The total charge for 2021 is approximately 15% to 24% (depending on retirement fund con tributions and level of remuneration) of gross salary for employ ees, and 35% to 47% for employers.
Some of the contributions are levied on wages, up to ceilings of EUR41,136, EUR164,544 or EUR329,088 per year (2020 amounts). However, the sickness contribution (employer rate, 13.3%), the basic state pension contribution (employer rate, 1.9%), the family allowance contribution (employer rate, 5.25%), and the housing aid, old-age, work accident and transportation contributions (employer rate, approximately 7%) are levied on the employees’ total remuneration.
Social security taxes are independent from CSG and CRDS con tributions (see Section A).
Provisions allowing certain employees to opt out of paying French statutory pension contributions. The PACTE law (an action plan for business growth) introduced a new article relating to the
social security code, which allows eligible employees and their employers to opt out of paying statutory pension contributions for a period of three years that is renewable for three additional years.
To opt out, the following conditions must be met:
• The employee has not been subject to compulsory pension contributions in the five calendar years preceding his or her start date in France.
• The employment began in France on or after 11 July 2018 with a French or foreign work contract.
• Employers and employees should be able to provide documen tation of a minimum EUR20,000 contribution per year to an eligible private French pension fund or to a foreign pension fund. EUR20,000 is equal to the employer portion of compul sory French retirement contributions for an employee with a gross annual compensation amounting to EUR134,000 if the employer contributes at the minimum ARRCO/AGIRC (French statutory pension) rates.
The exemption applies for both the basic state old-age pension and the compulsory complementary pension contributions, which are CNAV, ARRCO/AGIRC, CEG, CET and APEC. The employee portion and employer portion of these contributions are exempt. The maximum savings for an employee with a gross annual compensation that exceeds the pension rate ceiling (EUR329,088 for 2021) is EUR80,500 plus 2.3% of the gross annual compensation, if the company contributes at the minimum ARRCO/AGIRC rates.
The employer and the employee need to send a joint request to the relevant social security office (URSSAF). Documentation needs to be included demonstrating either a payment or intention for payment of the annual minimum contribution of EUR20,000 to an eligible alternative pension plan as well as a sworn state ment by the employee that he or she was not subject to a manda tory French pension regime in the five calendar years preceding the start of employment in France.
Benefits. The following benefits are available to an individual subject to the French social security system:
• Daily compensation in the event of interruption of professional activity
• Full retirement pension (basic state pension and complementa ry pension cover)
• Family allowance (exempt from income tax)
• Full professional accident coverage
• Partial or total medical expense reimbursement
Totalization agreements. The provisions of the French social tax code apply if work is performed on a regular basis in France, regardless of an employer’s place of residence or the source of payment. A French citizen or resident on foreign assignment out side France may continue to contribute to the French social secu rity system for a limited period under certain conditions.
To provide relief from double social security taxes and to assure benefit coverage, France has entered into totalization agreements with the jurisdictions listed below. The EU social security regula tion can usually provide for periods of continued coverage under
a home country social security regime for up to five years (with the mutual agreement of the competent authorities of both member states). Agreements with other jurisdictions apply for one to five years and periods of continued coverage may be extended with the mutual agreement of both competent authorities.
Algeria Greece New Caledonia
Andorra Guernsey Niger
Argentina Hungary North Macedonia
Austria Iceland Norway
Belgium India Philippines
Benin Ireland Poland
Bosnia and Isle of Man Portugal
Herzegovina Israel Quebec
Brazil Italy Romania
Bulgaria Japan St. Pierre and Cameroon Jersey Miquelon
Canada Korea (South) San Marino
Cape Verde Kosovo Senegal
Chile Latvia Serbia Congo Liechtenstein Slovak Republic
Cote d’Ivoire Lithuania Slovenia
Croatia Luxembourg Spain
Cyprus Madagascar Sweden
Czech Republic Mali Switzerland
Denmark Malta Togo
Estonia Mauritania Tunisia Finland Monaco Turkey
French Polynesia Montenegro United Kingdom
Gabon Morocco United States
Germany Netherlands Uruguay
An agreement with China Mainland has been signed but has not yet entered into force. Negotiations for a treaty with Australia are being completed.
D. Tax filing and payment procedures
Filing. French residents are required to file annual income tax returns (Form 2042), in general, by the middle to end of May following the end of the relevant tax year (tax year is the calendar year), declaring their net income and charges incurred during the preceding calendar year. The official deadline for filing is in principle the end of February following the close of the calendar year, but this deadline is normally extended to different dates each year depending on the circumstances. The actual filing deadline for a particular tax year is determined by the tax admin istration and is reflected on the tax return forms issued to taxpay ers. A married couple must file a joint return for all types of income and report their dependent children’s income, if any.
Details of certain income items, such as capital gains, real estate income and income received abroad that is taxable in France, are reported on separate returns attached to Form 2042.
Payment. French income tax for resident taxpayers is paid via the French withholding tax system, which has been implemented from 1 January 2019. This system applies to wages, pension pay ments and unemployment allowances paid by French entities. Wages paid by non-French legal employers through a payroll
outside France is also subject to a withholding process via shad ow payroll (a fictitious payroll used only for calculating the basis of the withholding tax due).
For income not subject to the withholding tax, such as business income, self-employment income and rental income, monthly or quarterly income tax installments are directly withheld from the French bank accounts of individuals.
Both resident and nonresident taxpayers must file in the following year an annual French income tax return. Based on the return, the French tax administration issues a French income tax bill in August or September, mentioning the additional amount to be paid or the amount of the tax refund.
A penalty of 10% of tax due is imposed for either a failure to file or a failure to pay by the due date. Other interest and penalties may also be assessed, generally at an annual rate of 2.4%, or at a monthly rate of 0.2%.
Nonresidents. The filing date for the annual nonresident tax return is generally mid-to-late May following the end of the tax year.
A nonresident with income taxable in France is not required to report that portion subject to final withholding tax on a nonresident tax return. This includes salary income taxed at 0% or 12% rates, dividends and interest. Dividends are subject to a 12.8% withholding tax, and interest is taxed at rates ranging from 0% to 12.8%. Tax treaties may modify these rates. Rental income and the portion of salary taxed at a 20% rate must be included on a nonresident return. Few deductions are allowed in calculating a nonresident’s taxable income. The tax liability with respect to the taxable income declared on the tax return is then calculated using the progressive rates (with a minimum of 20% for the income not exceeding EUR25,710 and 30% for the income exceeding EUR25,710) and the family coefficient system. The tax payable is reduced by withholding prepayments, including the 20% with holding on salary.
E. Double tax relief and tax treaties
If a double tax treaty does not apply, residents are generally allowed to deduct foreign taxes paid as an expense.
France has signed numerous double tax treaties. Double taxation is generally eliminated by a tax credit (for employment income, the credit is generally equal to the French income tax on such income) or by exemption with progression (income is exempt from French income tax but is taken into consideration in determining the effective rate of tax applied to the taxpayer’s other French taxable income).
France has entered into double tax treaties with the following jurisdictions.
Albania Hong Kong Oman
Algeria Hungary Pakistan
Andorra Iceland Panama
Argentina India Philippines Armenia Indonesia Poland
Australia Iran Portugal
Austria Ireland Qatar
Azerbaijan Israel Quebec
Bahrain Italy Romania Bangladesh Jamaica Russian Belarus Japan Federation
Belgium Jordan St. Martin
Benin Kazakhstan St. Pierre and Bolivia Kenya Miquelon
Bosnia and Korea (South) Saudi Arabia
Herzegovina Kosovo Senegal Botswana Kuwait Serbia
Brazil Kyrgyzstan Singapore
Bulgaria Latvia Slovak Republic
Burkina Faso Lebanon Slovenia Cameroon Libya South Africa
Canada Lithuania Spain
Central African Luxembourg Sri Lanka Republic Madagascar Sweden Chile Malawi Switzerland China Mainland Malaysia Syria Congo Mali Taiwan (Republic of) Malta Thailand Côte d’Ivoire Mauritania Togo Croatia Mauritius Trinidad and Cyprus Mexico Tobago Czech Republic Monaco Tunisia Ecuador Mongolia Turkey Egypt Montenegro Turkmenistan Estonia Morocco Ukraine Ethiopia Namibia United Arab Finland Netherlands Emirates French Polynesia New Caledonia United Kingdom Gabon New Zealand United States
Georgia Niger Uzbekistan Germany Nigeria Venezuela Ghana North Vietnam Greece Macedonia Zambia Guinea Norway Zimbabwe
F. Work and residence permits
EU nationals. Nationals of the EU (not including the United Kingdom), EEA and Switzerland are not required to hold work or residence permits. However, if needed for personal or profes sional reasons, a residence permit is issued on written request to the relevant police authorities (préfecture).
Temporary status. All EU (not including the United Kingdom), EEA and Swiss nationals working in France while remaining on the payroll of the company in their home country have temporary détaché status. The employee may enter France without a visa by showing a valid passport or national identity card. The home company must comply with secondment obligations in France and complete a posting declaration online (Déclaration préalable de détachement) before the arrival of the assignee, which outlines the nature, place, duration, and terms and conditions of the assignment. This document is automatically sent to the local Labor Inspection Officer in France. The employee must remain on the payroll of their foreign employer, and the salary received
while on assignment must be commensurate to the peer French employee.
Long-term status. EU (not including the United Kingdom), EEA and Swiss nationals hired by a French company on long-term expatriate status do not need a visa to enter France. They are not required to hold work and residence permits.
For both temporary and long-term status, on arrival in France, the employee must be in possession of a valid social security certificate of continued coverage or must be affiliated with the French statutory social security regime.
Non-EU nationals. Several immigration categories are available to non-EU nationals coming to France for work purposes.
Categories for non-EU, non-EEA and non-Swiss nationals sec onded to France. The categories for non-EU, non-EEA and nonSwiss nationals (including UK nationals) seconded to France are discussed below.
Salarié détaché ICT status is available to individuals who have at least six months of service within the group and are assigned to France for up to three years (no extension possible) by their home employer to perform an activity under its reporting line, such as providing specific expertise or performing managerial functions. They must remain on the payroll of their home employer, and the salary received while on assignment must be commensurate to the peer French employee. Under this category, a work visa appli cation is submitted at the French consulate in the assignee’s country of residence. For an assignment shorter than 12 months, the visa serves as a residence permit. If the assignment is for 12 months or more, the visa issued is valid for 3 months and will need to be converted into a residence permit. The stay in France under this status cannot exceed three years. No renewal beyond three years is possible. A new ICT permit can be applied for after a cooling-off period of six months.
Travailleur temporaire status is available to seconded assignees who are not eligible for the Salarié détaché ICT (for example, a foreign employee sent to a client site in the framework of a ser vices provision contract). Assignees must remain on the payroll of their home employer, and the salary received while on assign ment must be commensurate to the peer French employee. Under this category, a work permit application must be submitted to the French labor authorities. After the work authorization is granted, the individual applies for a visa at the French consulate in his or her country of residence. The visa is valid for up to 12 months and serves as a residence permit. If the assignment goes beyond the expiration date of the visa, a residence permit is required.
For all assignees seconded to France, the home company must complete and submit a Posted Worker’s Declaration (PWD) on the SIPSI online platform (Declaration préalable de détache ment) before the arrival of the assignee. This document outlines the nature, place, duration, and terms and conditions of the assignment and is automatically sent to the local Labor Inspection Officer in France. This requirement applies to any seconded employee regardless of their nationality (that is, both EU and non-EU employees).
Citizens of jurisdictions that have signed totalization agreements with France (see Section C) may continue to be affiliated with the social security scheme of their home jurisdiction for as long as the totalization agreement applies (for example, up to five years under the agreement between France and the United States).
Categories for non-EU, non-EEA and non-Swiss nationals locally hired in France. The categories for non-EU, non-EEA and non-Swiss nationals locally hired in France are discussed below.
Passeport talent salarié en mission status is available to intracom pany transferees temporarily integrated into the French company headcount (co-employment situation). The following are the eli gibility criteria:
• At least three months of service within the group
• Work contract of at least three months with the host company belonging to the same group
• Minimum salary requirement of at least EUR33,579 gross per year or equivalent to salary paid to a French employee in a similar role, whichever is more favorable to the individual
Citizens of jurisdictions that have signed totalization agreements with France (see Section C) may continue to be affiliated with the social security scheme of their home jurisdiction for as long as the totalization agreement applies (for example, up to five years under the agreement between France and the United States).
Passeport talent Carte bleue européenne (European Blue Card) status applies to highly qualified non-EU employees who meet the following conditions:
• Recognized degree of at least bachelor level or proof of five years of professional experience at a comparable level com mensurate with the position to be held
• Local employment contract for one year or more
• Minimum annual gross salary of EUR53,837
Passeport talent salarié qualifié status is available to non-EU nationals who hold a master’s degree (mastère) or licence profes sionnelle obtained in France, conclude a work contract of at least three months with a French company and earn at least twice the French minimum wage (approximately EUR37,310 gross per year).
For all types of Passeport talent status, a work visa application is submitted at the French consulate in the assignee’s country of residence. For contracts shorter than 12 months, the visa serves as a residence permit. If the assignment is for 12 months or more, the visa issued is valid for 3 months and must be converted into a residence permit. The residence permit is valid up to four years and is renewable.
Salarié permanent status is available to individuals hired by French companies under a permanent contract (CDI). In princi ple, the employer must search the local labor market before applying for a work permit for a foreign employee unless the job is listed on the official shortage occupation list. A work permit application must be filed before the arrival of the employee in France. After the work permit is granted, the employee must apply for a visa at the French consulate of his or her place of
residence abroad. The visa is valid for 12 months. At the expira tion of the visa, the individual applies for a residence permit valid for four years, which can be renewed.
If the individual is hired under a fixed-term contract (CDD), he or she falls under the Travailleur temporaire status. The visa obtained is valid for the duration of the work contract up to 12 months. If the contract is for a longer period, the individual must apply for a residence permit at the expiration of the visa.
The average timeline for processing work permit applications is six to eight weeks from the date when all required documents are filed with the authorities until the date when the work permit is sent to the relevant French consulate for visa issuance.
Categories for non-EU, non-EEA and non-Swiss nationals who do not have a salaried activity in France. The categories for nonEU, non-EEA and non-Swiss nationals who do not have a salaried activity in France are discussed below.
Non-EU, non-EEA and non-Swiss nationals who want to act as a legal representative of a French company must apply for a Passeport talent mandataire social visa at the French consulate in their country of residence before arrival in France. The individu al must have at least three months of service as an employee or a corporate officer in an entity of the group outside France and must earn yearly at least the gross equivalent of three times the French minimum wage (EUR55,965). The residence permit obtained in France is valid for up to four years and can be renewed.
The following categories of individuals are not required to obtain a Passeport talent mandataire social visa:
• Holders of a 10-year resident card (carte de résident; see Section G)
• Nationals of the EU, EEA or Switzerland
Entrepreneur/Independent Professional status is available to indi viduals performing a non-salaried activity or engaging in com mercial activities in France. It can be used when the Passeport talent mandataire social eligibility criteria are not met. If the individual resides outside France, he or she must apply for the relevant visa at the French consulate in the country of residence. The visa is valid for up to 12 months and serves as a residence permit. At the expiration of the visa, the individual is required to apply for a residence permit, which is valid up to four years.
Passeport talent créateur d’entreprise status applies to individuals who want to set up a company in France. The following are the eligibility criteria:
• Master’s degree or at least five years of relevant professional experience
• Presentation of a serious and feasible business project
• Investment of at least EUR30,000 in the business creation proj ect
If the individual resides outside France, he or she must apply for the relevant visa at the French consulate in the country of residence. The visa is valid for up to 12 months and serves as a
residence permit. At the expiration of the visa, the individual must apply for a residence permit, which is valid up to four years.
Short-term assignments. A work permit is required for shortterm assignments (up to 90 days) or work contracts. However, as of 1 November 2016, non-EU nationals seconded to France to perform audit and expertise assignments in the information technology, management, finance, insurance, architecture or engineering fields may be exempt from work authorization. Short-term assignments cannot be extended beyond 90 days.
Other categories of activities that trigger the work permit exemp tions are the following:
• Sporting, cultural, artistic and scientific events
• Conferences, seminars and trade shows
• Production and distribution of cinematic and audiovisual works, shows and recordings
• Modeling and artistic posing
• Personal service workers and domestic workers working in France during their private employers’ stay in the country
• Occasional teaching activities by invited lecturers
Although a work permit exemption might apply, PWD continues to be required (see above).
G. Permanent residence permits
After five consecutive years of residence in France and payment of French income tax, the holder of a residence permit may apply for a resident card (carte de résident), which is valid for 10 years and is renewable. However, some categories of residence permit do not give access to a resident card. The relevant police authori ties have substantial discretion with respect to the approval of a permanent resident card, which allows individuals to work for any employer in France.
H. Family and personal considerations
Family members. Non-EU, non-EEA and non-Swiss nationals who accompany their EU national spouse to France must obtain a residence permit with the endorsement “Family Member of an EU citizen” (carte de séjour “Membre de famille d’un citoyen UE”) if the EU national lives in France. They are granted the same right to work as their EU spouses.
Non-EU, non-EEA and non-Swiss nationals who accompany their non-EU national spouses to France must also obtain a resi dence permit if they reside in France for more than 90 days.
Spouses of non-EU, non-EEA and non-Swiss nationals in the following categories receive a residence visa/permit that entitles them to work in France:
• Intracompany secondment (Salarié détaché ICT)
• Intracompany local transfer (Passeport talent salarié en mission)
• European Blue Card (Passeport talent Carte bleue européenne)
• Qualified workers (Passeport talent salarié qualifié)
• Corporate officers (Passeport talent mandataire social)
• Business setup (Passeport talent créateur d’entreprise)
• Spouse of a French national
Spouses of non-EU, non-EEA and non-Swiss nationals living in France under a Salarié permanent, Travailleur temporaire or Entrepreneur status are not allowed to work in France. Non-EU, non-EEA and non-Swiss dependent children under the age of 18 obtain a circulation document for foreign minors (document de circulation pour étranger mineur) if they accompany non-EU, non-EEA and non-Swiss nationals to France.
Marital property regime. In the absence of a marriage contract, the default marital property regime in France is community property. For spouses married in France without a specific contract, all property is community property (including income derived from separately acquired property, but excluding gifts and inheritances and assets owned before the marriage). Spouses may elect a different marital regime (for example, separate ownership) by prenuptial agreement or, during the marriage, by a court-approved notarial deed.
Forced heirship. A person may not give away a certain portion (called the réserve) of his or her property by either inter vivos or testamentary transfer. The reserved portion is one-half of the property for a person with one child and a spouse, two-thirds of the property for a person with two children and a spouse, and three-quarters of the property for a person with three or more children and a spouse. This measure may apply to nonresidents who own property located in France.
Driver’s permits. Holders of foreign driver’s licenses must apply to exchange them for French driver’s licenses before the end of the first year of residence in France. An exchange is authorized automatically for licenses issued by certain countries or certain states in a country. For example, with respect to the United States, automatic exchange is authorized for the following states.
Arkansas Iowa Ohio Colorado Maryland Pennsylvania Connecticut Massachusetts South Carolina Delaware Michigan Texas Florida New Hampshire Virginia Illinois Oklahoma Wisconsin
Individuals with driver’s licenses from other countries or states for which an exchange is not authorized must take the French driver’s license test, which consists of a written examination and a practical driving test.
Holders of valid driver’s licenses from EU member states are not required to exchange them for French licenses. However, licenses from certain EU member states may need to be renewed regularly.