Tax system of France.
France has traditionally been reputed to be a country with an intricate taxation system and a high level of administrative expenses. However, it would be a mistake to believe that all sections of the population pay the same. Individuals who live in the country for less than 183 days a year have the status of tax non-residents, and for them the tax burden is greatly facilitated. In this category, immigrants crossing the border automatically fall for the first time.
Living in France, Russians are exempt from double taxation an appropriate agreement between both countries. It should be especially noted low in comparison with other European countries, property taxes, which is often an important source of income for foreigners. And the fiscal attractiveness of France for those who want to open their own business here, on the contrary, leaves much to be desired.
Taxes on profits and income.
The status of a non-resident does not exempt its carrier from paying income tax (impot sur le revenu), but it is levied only on sources of income within the country. While the resident is taxed the profit received, including in any other country in the world. Taxpayers are all adults who reside on the territory of France. The rate of income tax varies depending on the total income of the family, if it exceeds 5 963 euros, which is indicated in the tax return and includes all sources of income for the past year.
In the first year of residence in the country, the taxpayer must himself apply to the nearest tax center at the place of residence to receive a declaration that must be filled in and submitted to the tax authorities before the end of March. For incorrect information and delay, there is a penalty. The declaration is filed even with zero income.
Legal entities pay a corporate tax, the rate of which is 15-33.33%.
Income tax in France.
The transfer of property to the estate by relatives in France is subject to an inheritance tax (l’impot sur les successions). The rate varies widely and depends on the degree of kinship: parents and children have priority in inheritance, followed by brothers and sisters.
In some cases, the tax amount reaches more than half of the value of the property itself. Cases of the sale of real estate to pay off the tax burden are not uncommon. The tax also applies to non-resident property.
In order to withdraw property from the French tax jurisdiction, a foreigner can register S.C.I. (Societe Civile Immobiliere) – a civilian company for real estate transactions. After that, the house or apartment falls into the legal field of the native country of the emigrant.
Tax on wealth.
Another tax payable in France is the solidarity tax (impot de solidarite sur la fortune – ISF), also known as the wealth tax.
Since January 1, 2015, it applies to persons whose state in the country exceeds 1.3 million euros. From this money various social programs of help to indigents are financed. The tax rate can vary from 0.5% to 1.5% depending on the amount of income. Profit is considered mainly from immovable assets, so you can avoid payment by also registering S.C.I. Another way to get rid of the wealth tax can be considered the use of real estate for professional activities or leasing.
Tax on wealth in France.
In France the employer keeps a certain part of the salary monthly. These social taxes compensate for medical expenses, unemployment benefits and other costs for the employee. The rate varies from 15% to 23% depending on the level of wages. In addition, in each region, department or commune, local taxes are levied to replenish regional budgets.
The cornerstone of indirect taxation in the country is the value-added tax. It is included in the price of most goods and services. It is France that is the birthplace of this tax, and its rate here is # 8211; one of the highest in Europe.
Medical, educational and state institutions, as well as gambling and charity are exempt from VAT.
According to Credit Suisse.
Indirect taxation also includes tax allowances for gasoline, alcohol, tobacco and matches.
Taxes on real estate.
France is one of the 15 European countries most popular for buying property by foreigners.
After the acquisition of housing first thing is necessary to register real estate, paying for the services of a notary. He will also have to pay a stamp on the registration of the property right. The fee for primary real estate will be only 2-3%. If the object you like is more than 5 years old, you will need to pay 6-7% of its value.
The size of the notary commission in France.
According to Credit Suisse.
The owner of housing in France annually pays a property tax (taxe fonciere), depending on the location and area of the latter. To calculate the rate, the term “conditional rent” is used. In the industrialized city property tax will cost an amount equal to half a month’s rent. In small and less popular cities, the rate will be equal to a semi-monthly rent.
The tax on residence (taxe d & # 8217; habitation) extends to the owners and tenants of housing. The rate may vary depending on the welfare of a particular city, the size of the family and its income. The minimum amount is equivalent to the month of “conditional rent”. However, the tax benefit from the acquisition of housing in an industrialized area naturally equals higher prices.
When buying a new property should pay special attention to the choice of a professional realtor. After all, the documents that have been correctly written out can be exempted from taxes for as long as 5 years.
Often, foreigners purchase housing in the country for subsequent rental. In this case they are obliged to pay tax on income from rent (l’impot sur le revenu locatif). The rate for a non-resident varies from 20% to 45%. The expenses for repair and maintenance of housing are deducted from the taxable base. It is also necessary to pay a social fee of 15.5%. If the property is owned by a legal entity, the tax rate will be 33%.
Tax on rental income in France.
According to Credit Suisse.
When the property is resold, the capital gains tax becomes effective. At the same time, the taxable base is the difference between the prices for buying and selling a sale. For 2015, the rate for taxpayers was 40.5%. The amount of tax is reduced in proportion to the time of ownership of the property. Deduction can reach 24% of the rate after 18 years of ownership. After 22 years tax is not charged. The tax rate includes a special social tax of 15.5%, which is not paid by non-residents, and an additional tax of 6%. Discounts for social tax also depend on the time of tenure. They are 2% after 6 years, 4% after 18 years and 8% after 25 years. The 30-year period of tenure completely exempts from fees.
Since 2013, the country introduced an additional tax on the sale of real estate, the rate of which depends on the amount of capital growth and ranges from 2% to 6%.
In France, there is an important incentive to rent real estate or to sell it. If the unfurnished housing is not occupied for more than a year, it is taxed on vacant property. The list of cities where the tax is levied can be found here. Basically, these are small communes with a population of no more than 50 thousand people. A year later, the vacant object will cost the owner 12.5% of the average market income from renting such housing. Then the rate will increase to 25%.
The real estate issued for a legal entity falls under the annual tax on indirect ownership, which is 3% of the market value of housing. It is exempted from its payment by the immovable property of companies from countries that have concluded an agreement with France, which opens information about their shareholders to local authorities.
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Despite the fact that almost all European countries are striving for the unity of laws and integration in the spheres of economic and social policy, the tax systems of European states do not differ in unity.
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