France has in place a system of working tax credits, available to both small business owners and employees.

The tax credit is called la prime pour l'emploi (PPE) and comes in the form of a support payment from the French tax office.

Eligibility

• Being tax resident in France;

• At least one member of the household running a business or in salaried employment;

• The net total income of the household below a certain threshold;

• The business or salaried income between a minimum and a maximum threshold;

• No member of the household must be liable to wealth tax.

Level of Tax Credit

As is usual with French social security and tax benefits the calculation of the tax credit is complex, but the amount varies according to the composition of your family and your business/salaried income.

The level of the tax credit is then proportional to the level of the business/salaried income.

By way of example a single person with net income from a business of €10,000 would be entitled to €779; a couple with two children, each earning €13,000 net income from a business would be entitled to €1,790 a year.

Pension income and rental and investment income are not taken into account for the calculation of the level of the benefit, although your total income cannot exceed a certain threshold.

To have been eligible in 2012 your total net income (revenu fiscal de référence) for income earned in 2011 must not have acceded:

• €16.251 or single, widowed or divorced persons;

• €32.498 for married couples or those in a civil partnership.
  

Application

There is no need to make application for this tax credit, as it will be granted automatically to you if you meet the criteria. You will be informed through your tax notice, following which you will receive a cheque.