5. Calculating Your Income Tax Liability in France

1. 5.1. Composition of Your French Household
2. 5.2. French Income Tax Rates
3. 5.3. French Tax Allowances

In determining your tax liability the tax authority will first establish your gross earnings, your revenu brut global.

They will then make certain allowances against this income to arrive at your net earnings, your revenu net global.

Your tax liability will then be calculated on a progressive basis, having regard to the composition of your household and the allowances to which you may be entitled.

5.1. Composition of Your French Household

In order to minimise the impact of higher rates of taxation on those with dependants, the size of the household is taken into account in determining the total amount of income tax which should be payable.

This is called the quodient familial.

The method used is to divide the household into ‘parts’ corresponding to the size of the household.

The total income of the household is then divided by the number of members in it.

A notional tax charge is created for a single ‘part’ on a progressive basis using the income tax bands.

The resulting figure is then multiplied by the number of ‘parts’ to give the tax liability for the household.

So, a single person would start paying at higher rates of tax than a three person household on the same income because, in the latter case, tax is calculated on the partial share of the income of each member of the household.

As might be expected there is a complicated set of rules for calculating the number in each household to take account of the varied and different circumstances of families.

Thus, in a household with two adults, the household income would be divided by two, whereas in a household with two parents and two children the household income would be divided by three.

The rules are slightly more generous for single parent household and those where there are handicapped children or adults in the household.

Unmarried couples in a civil partnership (called PACS) are treated the same as married couples.

In order to ensure that those with large incomes do not benefit over generously from this system the amount of tax savings for dependants is also limited to a maximum sum where the income of the household exceeds certain limits, although these limits are fairly generous and should not be relevant to most expats.