American citizens moving to France: what taxes? (2024)

FAQs

American citizens moving to France: what taxes? ›

Self-employed U.S. expats living in France are only subject to France social security taxes, not U.S., thanks to the US-France Totalization Agreement. This agreement ensures American expatriates avoid double taxation, clarifying that their social security contributions are due only in the country where they work.

If you are a U.S. citizen or resident living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.

As a French resident, you will pay French taxes on most income, but there is an exemption for certain retirement and pension programs that includes your social security income. So, you will be reporting social security income to both governments, but it is taxable in the U.S. (See Article 18 of the Tax Treaty here).

Non-residents pay tax on French-sourced income at a flat rate of 20% for income up to €27,478 and 30% for income above this threshold. Savings, investments, and bank interest are also subject to income tax at a flat rate of 30%. Income tax returns are due in May or June each year, depending on where you live in France.

The US France tax treaty, originally signed in 1994, serves as an agreement between the two countries for determining the taxation of income where both nations may have the legal right to tax according to their respective laws.

The US is one of the few countries that taxes its citizens on their worldwide income, regardless of where they live or earn their income. This means that American expats are potentially subject to double taxation – once by the country where they earn their income, and again by the United States.

An employee residing in France for less than 183 days does not owe tax on income earned through their work in the country, as long as their remuneration is paid by or on behalf of an employer which is not established in France.

If you have social security credits in both the United States and France, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country's system, you will get a regular benefit from that country.

Taxes on retirement in France

You'll need to fill in an annual tax declaration, even if you're not making any income. France has agreements with many of its European neighbors and other countries around the world.

the USA ones may look unreasonable. In contrast to the US combined rate of 15.3%, European rates range between 13.97% (not including medical insurance and pension contributions) in Switzerland and a whopping 65-68% in France, based on the 2022 table by Trading Economics.

What is the 30% rule in France? ›

For French residents : the 30% flat-rate levy (of which 12.8% for income tax and 17.2% in social levies) applies to investment income including dividends, interest and capital gains on the disposal of securities and shares. The 40% allowance on dividends and similar income does not apply.

French healthcare costs

Medical treatment and tests are partially paid for by the government, but the patient is responsible for the remaining amount. French state health insurance covers 70–100% of necessary treatments like doctor visits and hospital stays.

As of 2024, the average statutory top personal income tax rate is approximately 42.8% in Europe. The nations that get the shameful medal for highest tax OECD countries include Denmark, France and Austria, with rates ranging between 55 and 55.9%.

Unlike residents, non-residents in France are only taxed on their French-sourced income. Non-resident taxes are typically collected by withholding at the source. These withholding taxes are applied at progressive rates of 0%, 12%, and 20%, depending on the total amount of taxable income.

To avoid double taxation, when this income has been taxed under the terms of a treaty in the country or territory from which it originates, the tax paid outside France is not deductible from income but provides entitlement to a tax credit that may be deducted from French tax.

The First and the Second Estate formed the privileged classes. They owned most of the land even though they were only a tiny fraction of the French population, all the important posts of the state were held by them and they were exempted from paying taxes. The Third Estate, on the other hand, received no privileges.

I'm a U.S. citizen living and working outside of the United States for many years. Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.

The answer depends on the state. Some U.S. citizens and residents living abroad must file a state tax form, but not all expats are required to do so. What U.S. expats do for state taxes depends on which state they lived in before their move to another country.

In both cases, the same tax rules apply to you as any other citizen of the US, including all other dual citizens. You will have to file a US tax return every year, and you may have to pay taxes on any income you receive. The only way to escape this obligation is to renounce your citizenship.