Taxes and finances in France: Guide for expats | KOCH Moving Logistics

Moving to France is an exciting adventure that offers many new opportunities and experiences. One essential aspect that emigrants must consider is taxes and finances in France. This article provides comprehensive information about the French tax system, the best banks and tips for international money transfers for anyone wishing to emigrate to France.

The French tax system is characterised by a strong central state and is administered by the Direction Générale des Finances Publiques (DGFiP) . A fundamental special feature is the determination of the tax rate at household level: your total family income is added together, then the tax burden is divided by the number of "parts" (parts) of your household. Income tax reaches top rates of 45% (plus a surcharge of 3% or 4% for very high incomes) and is therefore higher than in Germany, but below the Belgian level. France is known for its complex but highly social system and offers tax advantages for certain groups (e.g., EU secondees).

France uses a progressive tax system with a graduated scale, adjusted annually for inflation. For the 2026 tax year (income from 2025), the adjustment of the tax bands was made by 1.733 percent due to rolling inflation of 2.6 percent. Your worldwide income is taxed once you are tax‑resident in France (domicile or habitual residence).

A surcharge of 3% is levied on income over €250,000(individuals) and 4% on income over €500,000 (couples). Tax allowances depend on your household structure. The surcharge for high incomes introduced in 2025 continues and remains valid until the public deficit falls below 3% of GDP.

A single person (1 part) with an income of €50,000 pays about €6,840 in tax. A married couple with two children (3 parts) with the same total income pays only about €2,743, because the tax burden is distributed over more "parts".

TAX RATES FOR FOREIGNERS: Non‑residents in France (not tax‑resident) are subject to a minimum tax rate of 20 percent (up to €29,579) and 30 % (above that) on their French‑source income.

In France, social security contributions (for health, pension and unemployment insurance) are deducted directly from gross salary. The employer also pays a significant portion. For employees, the employee contribution rate is about 20% of gross salary. A flat social levy rate of 17,2 % is levied on capital income (dividends, interest).

Value Added Tax in France is generally 20 percent. A reduced rate of at 10 percent applies to catering and renovation work. Further reduced rates of 5,5 % apply to food, books, energy, public transport and some cultural services. As of 1 January 2026, TVA rates on certain energy sources were adjusted.

France no longer levies a classic wealth tax on total assets. The former solidarity tax on wealth (ISF – Impôt de Solidarité sur la Fortune) was replaced in 2018 by the real estate wealth tax (IFI – Impôt sur la Fortune Immobilière) . This tax is levied only on real estate assets (directly or indirectly, e.g., via shares in property companies). The allowance is €1,300,000. Above this threshold, a progressive tax rate of 0.5% to 1.5% is due on the excess amount.

If you work in France as a foreign employee, there are two important tax aspects to consider: withholding tax (Prélèvement à la source – PAS) and the special tax regime for certain expats.

Since 1 January 2019, income tax has been deducted monthly directly from wages. Withholding tax is an advance payment on your annual income tax, not the final tax liability. The amount withheld is calculated based on your personal tax situation (marital status, household composition). At the end of the tax year, the annual tax return (déclaration de revenus) reconciles the difference between the withholding tax already deducted and your actual tax liability. In many cases, you will receive a refund if too much was withheld. For non‑residents with French‑source income, updated withholding tax rates apply (0%, 12% and 20%).

French law provides for a favourable partial tax regime for employees temporarily seconded to France by a foreign company, as well as for "returning" expats. If the conditions are met , certain salary components (e.g., allowances for relocation, expatriation) may be exempt from French tax. The regime applies for a maximum of five years and must be actively applied for by the employer.

Even if you already pay withholding tax, you are generally required to file an annual tax return online or on paper. The tax return in France is the central instrument for calculating your annual income tax. The state opens the online portal impots.gouv.fr each year, usually in April (2026 on 9 April). There you can fill out and submit your tax return online.

A comprehensive double taxation agreement exists between Germany and France , which preventsyour income from being taxed in both countries. The agreement contains special provisions for various types of income.

For employees (private sector), the 183‑day rule generally applies: if you stay in France for less than 183 days in the calendar year, your salary is paid by a German employer, and the costs are not borne by a French permanent establishment, the right to tax remains with Germany. Otherwise (particularly in the case of a longer stay or work for a French employer), France taxes the employment income.

FOR CROSS‑BORDER COMMUTERS (FRONTALIER): Complex rules apply for persons who live in Germany and work in France (or vice versa). In principle, employment income the state of employment in the state of employment (if the employee does not return to their residence on fewer than 45 days). If non‑return days exceed 45 days, the cross‑border commuter status is lost, and the employee becomes fully taxable in the state of employment. Non‑return days are being checked more strictly from 2026. The agreement also contains special provisions for public sector income and pensions.

PENSIONS: Pensions from statutory pension insurance are taxed in the state of residence. Civil service pensions may be taxed in the source state.

Opening a bank account (compte bancaire) in France is an essential step to establishing yourself in the French economy. France has a modern banking system and is one of the leading financial centres of the eurozone.

To open an account in a branch, you generally need:

– a valid passport or identity card;

– proof of address in France (e.g., rental contract, electricity bill, official certificate of residence – "justificatif de domicile");

– proof of your employment (employment contract, payslips) or for students an enrolment certificate;

– Ihre your tax number (numéro fiscal) (if already available; otherwise the account can be opened provisionally).

International money transfers between France and Germany are particularly simple and low‑cost due to the common currency (euro) and EU regulation.

 

– BANK TRANSFERS (SEPA): The standard for euro transfers within the SEPA area. Fees depend on your account model with your French bank. Many banks have free or very cheap online current accounts for salary deposits. The transfer generally reaches the recipient within one banking day.

 

– SPECIALISED TRANSFER SERVICES: Services such as Wise (formerly TransferWise) or Revolutare specialised in international, cross‑border money transfers with transparent exchange rates and low fees – particularly useful if you need to transfer money regularly into a currency outside the euro area.

 

– PAYPAL: Simple and fast for smaller amounts, but often with higher fees than bank transfers and specialised transfer services.

 

REPORTING OBLIGATION FOR FOREIGN ACCOUNTSFrench taxpayers must report their foreign accounts to the French tax authorities (DGFiP). This includes savings and current accounts, securities accounts and other accounts abroad. The report must be submitted annually via the portal impots.gouv.fr (as part of the tax return). Non‑compliance with this reporting obligation can lead to fines. This also applies to German expats who emigrate to France and still hold German accounts.

France has a complex, multi‑tier pension system with a mandatory public pay‑as‑you‑go system. The reform of the retirement age (from 62 to 64) has been suspended until at least 2028; the retirement age remains 62 years and 9 months for the time being.

 

– Statutory pension (Régimes de base): The basic pension is managed for all employees by the Caisse Nationale d'Assurance Vieillesse (CNAV). It is financed by social security contributions deducted directly from gross salary. The amount of the pension depends on your best 25 years of employment (for private sector employees) and the number of quarters you have contributed. The special contribution for employers on severance payments and early retirement benefits has been increased from 30% to 40%.

 

– Occupational pension (Régimes complémentaires): For most employees, there are mandatory, pay‑as‑you‑go supplementary schemes: Agirc-Arrcofor employees, Agircfor managers. These supplementary pensions form a significant part of retirement provision.

 

– Private pension: the state and supplementary pensions, you can make private provision, for example via special pension savings plans (PER – Plan d'Épargne Retraite) or life insurance (assurance vie).

 

As a German emigrant, you should check whether your German pension entitlements are preserved and how they harmonise with the French system. The double taxation agreement regulates the taxation of pensions from Germany.

Moving to France requires thorough planning and a good understanding of the tax and financial environment. Particularly for German emigrants, the complex but highly social French system takes some getting used to. The progressive income tax rates are offset by excellent infrastructure (health, education, transport) and a comprehensive social safety net. Those who engage with the French bureaucracy and the special features (household taxation, withholding tax) will find a high quality of life and a stable economic environment in France. We at KOCH Moving Logistics are by your side to make your dream of emigrating to France as smooth as possible.