Planning your expat tax liabilities before moving to France

Planning your income tax liabilities is essential for expat peace of mind when moving to France

Any talk of income tax anywhere in the world causes mild discomfort at best, but careful planning of tax liabilities is an essential part of all expats’ new lives in France. Whether you’re dreaming about a complete move or purchasing a property as a second home, certain French tax advantages can represent good value. Horror stories about French tax officials are common knowledge in the expat community, but getting it right first time is possible with a little professional help.

For married couples, tax is calculated on a household basis, adding your two tax-free allowances together before calculating how much you owe. For pensioners, an allowance of 10 per cent before tax proves that old saying - every little helps. Individuals in the UK pay higher rate taxes at 40 per cent once the £43,000 threshold has been breached, with the threshold in France set at a refreshing 70,000 euros, meaning even higher rate earners pay less tax.

Tax rates in France kick in at 14 per cent on earnings from €9,807 to €27.086, with the next level at 30 per cent payable until earning over €72,617. The 41 per cent tax rate is payable on income between €72,617 and €153,783, and those earning more than the last figure pay 45 per cent tax. For a couple with a joint income of €40,000, liability is calculated as if each earns €20,000, with the first €9,807 tax free and the remainder at 14 per cent.

In addition, there’s a fairly complicated network of discounts, reductions and exemptions which, for the majority of expats, need help from either a maths genius or a tax expert in order to clarify your entitlement. Planning ahead is the best idea, especially if you’re intending to buy a property in France or invest your savings to provide extra income. Paying the exact amount of tax due and not even a single euro more is a good start to any expat’s dream retirement in France.