French Income Tax Rates for 2012

Tuesday 01 November 2011

The government have published the proposed income tax rates and thresholds for 2012.

POSTSCRIPT: For more up to date information on rates readers are invited to refer to our article French Income Tax 2017.

There are five rates of tax, which all remain unchanged from 2011.

However, the income thresholds at which these rates become payable has been increased by 2.1%, in line with the consumer price index, although it remains subject to parliamentary approval.

Update: Since this article was published the government has announced that there will be no inflationary increase for 2012 or 2013, as part of budget austerity measures.

The following table shows the new rates and thresholds that will be used to assess your liability to income tax on your income earned in 2011, for income tax payable in 2012.

The rates are applied on a sliced basis for each taxable member of the household, so that each part of the income is charged on a progressive basis.

Thus, if a couple have net income of €30,000 in the year there are two 'parts' of €15,000, with each part taxed using the scale rates.

There are also various allowances for different types of household, eg widows, disabled, elderly, dependent children.

Accordingly, given the manner in which liability to income tax is assessed in France, the figures mean that a couple would need to have a joint net income of around €21,000 this year before they would pay any income tax in 2012.

Our 'Guide to Tax in France' below provides information of the incidence of income tax on different households, although at this stage only the figures for 2011 (for income earned in 2010) are available.

Income tax rates and Thresholds
Income Threshold	Tax rate
Up to €6,088	0%
Between €6,089 - €12,146	5,5%
Between €12,147 - €26,975	14%
Between €26,976 - €72,317	30%
Above €72,317	41%

Taxe Sur les Hauts Revenus

Although it will only be of academic interest to the overwhelming majority of our readers, the government has also decided to impose a special income tax on the rich.

Those with an annual income (including income from capital) of between €250,000 and €500,000 will pay an tax of 3% on income between this range, while those with an income above €500,000 will pay at the rate of 4% on any income above the threshold.

The tax is imposed on net income, after determination of the tax liability under the standard scale rates. As a result, its impact will be limited, estimated to affect only around 25,000 taxpayers and costing €400m.

This tax is stated by the government to be 'temporary', until there is a balanced budget, so it is likely to be around for quite a while!