France is located in western Europe. As a core member of the European Union, France ranks second in population among EU countries, second only to Germany.
France has a sound tax system and adopts a comprehensive income tax system. According to the different tax objects, it can be divided into income tax, consumption tax, capital tax and local tax; according to the tax ownership, it can be divided into central tax and local tax; the tax feature is the territorial principle, and indirect tax (mainly VAT) is the main tax, supplemented by direct tax.
The current taxes in France mainly include: value-added tax (VAT), corporate income tax (imp?t sur les société), personal income tax (imp?t sur le revenu), consumption tax (droits d’accise), tariff (droits de douane), dividend tax (imp?t sur les dividendes), capital gains tax (imp?t sur le capital), property tax (taxe foncière), etc.
(1) Value Added Tax (VAT)
The general VAT rate in France is 20%, with preferential rates of 10% and 5.5%, and a special preferential rate of 2.1%.
The standard rate applies to the sale of goods and provision of services, as well as the import of goods; the preferential rate applies to movie tickets (10%), the transfer of artworks for commercial purposes (10%), and the import of artworks, collectibles and antiques at 5.5%; the special preferential rate applies to the sale of drugs covered by the national medical insurance, the distribution of newspapers and magazines, and concert and concert tickets.
VAT calculation method –
Import tariff = declared value of goods x tariff rate;
Import VAT = (declared value of goods + first-leg freight + tariff) x import VAT rate;
Sales VAT = platform sales price x sales VAT rate.
(2) Corporate income tax (imp?t sur les société)
Also known as corporate tax, companies (including resident companies and non-resident companies) only pay corporate income tax on their production and business income obtained in France and the income directly obtained by resident companies from abroad. The income obtained by overseas subsidiaries and branches abroad is not included in the taxable income of companies in France. In order to reduce the tax burden on companies, the French government has gradually adjusted the corporate income tax rate from 33% in 2017 to the current 25%.
(3) Personal income tax (imp?t sur le revenu)
French personal income tax is divided into resident taxpayers and non-resident taxpayers. Resident taxpayers pay personal income tax on their income from all over the world, and non-resident taxpayers pay personal income tax on their income from France. French personal income tax is based on a progressive tax rate, with a minimum of 0 and a maximum of 45%. The basic tax exemption is 10,225 euros, and there are different levels of tax relief for singles, married people, married people with children, and married people with several children. In addition, domestic companies that employ employees need to pay social security contributions for their employees, which are deducted from their wages. Social security contributions account for about 20% of the total wages.