Tax system in France
France taxes residents on worldwide income and non-residents on French-source income. Personal income tax (IR) is progressive from 0% to 45% on the household share after the family quotient, and high earners can also face a 3% / 4% exceptional contribution.
Most dividends, interest and securities gains fall under the prélèvement forfaitaire unique (PFU). From 2026 the standard combined rate is 31.4% (12.8% income tax + 18.6% social levies), with an option to elect the progressive scale instead when that produces a better result.
Companies generally pay 25% corporate income tax, with a 15% reduced rate on the first EUR 42,500 for qualifying SMEs. France also levies VAT, payroll social security, real-estate wealth tax (IFI), inheritance and gift tax, property taxes and, for large multinationals, Pillar Two minimum tax.
Tax rates at a glance
- Income tax
- 0% - 45%Progressive
- Wealth tax
- IFI 0.5% - 1.5%
- Inheritance tax
- 5% - 60%
- Capital gains tax
- 31.4%
- Corporate tax
- 25%
- Dividend tax
- 31.4%
- VAT
- 20% / 10% / 5.5% / 2.1%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ExpatsEmployeesFoundersInvestorsCross-border groups
Watch out for
- France is not a low-tax jurisdiction. Social charges on employment income and investment income often matter as much as the headline income-tax bracket.
- There is no general net wealth tax on financial assets, but IFI still taxes non-professional real estate above EUR 1.3 million, and property, transaction and succession taxes remain material.
- The 2026 rise in social levies on many capital items lifted the standard PFU from 30% to 31.4%. Model both the flat tax and the progressive option before filing.
- Exit tax, CFC-style anti-abuse rules, transfer pricing and treaty residence all matter if you are moving in or out of France with substantial shareholdings.
Frequently asked questions
Is France a high-tax country?
Yes. France combines progressive personal income tax, heavy social charges, 25% corporate tax, VAT, real-estate wealth tax and inheritance tax. The exact burden depends on salary versus capital income, household composition and asset mix.
Does France have a wealth tax?
France no longer has a broad net wealth tax on financial assets. It does levy IFI, an annual tax on non-professional real estate when net taxable real-estate wealth exceeds EUR 1.3 million.
What should expats and founders check first?
Start with tax residence, payroll social security, PFU versus progressive taxation of investment income, IFI exposure, inheritance rules and whether a French company triggers 25% corporate tax plus local and payroll costs.