French tax system is one of self-assessment.
Tax is assessed at the level of the tax household, i.e. the family entity consisting of a single person, spouses (regardless of marital status) with their children and other dependents. In other words, the tax base is generally the total income of the different members of the tax household.
Barring exceptions, all income, regardless of its origin, is aggregated to determine an overall net income to which one tax scale applies.
This scale has progressive income brackets:
|Income group||Tax rate|
|Up to €9,710||0%|
|€9,711 up to €26,818||14%|
|€26,819 up to €71,898||30%|
|€71,899 up to €152,260||41%|
|More than €152,260||45%|
The basis for assessing French income tax is that the combined income for the household is broken down into units, or “parts”. This is used to take into consideration the dependents and to reduce the impact of the progressivity of the tax accordingly.
For example, for a married couple this means that the joint income is divided equally between both of them. The half share is applied to each of the tax brackets and the resulting tax calculation is then multiplied by two.
A married couple with children has the benefit of additional “sharing” for their children (i.e. the children are considered to have earned a share of the household income), as shown below, which further reduces the tax liability.
|Married couple without children||2 parts|
|The first two children||½ part each|
|Third and subsequent children||1 part each|
For example, a married couple with 4 children could divide their combined household income into 5 “parts” with the various tax brackets being applied to only one-fifth of the total income. The resulting tax calculation is then multiplied by the number of “parts” (i.e. 5) in the household.
This may seem like a very complicated calculation method, but it has the benefit of keeping your marginal tax rate as low as possible.
Therefore, in reality, a large “household” will have to earn a very high taxable income before moving into the top tax bracket, and for the majority of couples, if one spouse earned the majority of the earned income or pension income, the French tax is lower than the UK counterparts for example.
Finally, there are certain cases where additional “1/2 parts” are allowed, such as if you are widowed and have raised children, who are now adults. So it is very important to complete the section about your personal situation as completely as possible.
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