In France, individuals are subject to income tax, assessed at progressive rates, on their annual net global income (revenue net global). Individuals subject to French individual income tax may be divided into two main categories:

–       individuals who, for tax purposes, are deemed to be domiciled in France, and

–       individuals who have French-source income but who are not domiciled in France.

As a general rule, domiciliaries of France are subject to unlimited tax liability on their world-wide income from all sources regardless of their nationality (CGI, art. 4 A).


In the absence of contrary provision in an applicable double taxation treaty, a person is deemed to have his tax domicile in France if he satisfies any one of the following criteria:

1. his principal residence is in France or he sojourns in France for more than 183 days during a year,
2. his household, i.e., his wife and/or his children, reside in France,
3. his principal professional activity is carried out in France, or
4. his income is principally derived from capital held, managed or invested in France (CGI, art. 4 B).

Non-domiciliaries are subject to tax on all of their income derived from sources within France, i.e., money from assets situated in France or activities carried out in France.

Non-domiciliaries who maintain a residence in France are subject to tax on the higher of their actual income from sources in France or a sum equal to three times the rental value of their residence(s) in France. The foregoing general rules are subject to modification pursuant to the terms of a double taxation treaty. In the event of a double taxation treaty, the taxation of three times the rental value described above does not apply where the non-domiciliary can prove that he is subject to tax on his world-wide income in his country of domicile which equals at least 2/3 of the tax he would have paid in France on the same income. Such taxation also does not apply for a specified period where the taxpayer is a French national and is transferred abroad for professional reasons.

 For purposes of the income tax imposed on French domiciliaries, a family is treated as a single taxable unit: family income is aggregated and taxed to the head of the household. All individuals are subject to the same progressive rates in France; there are no separate tax tables for single or married persons. In order to take into account the family situation of the taxpayer and to make allowance for the number of dependents each taxpayer may have, the family quotient (quotient familial) system has been devised to alleviate the burden of the progressive rate of income tax. 


Corporate income tax at a flat rate of 33.33 percent is imposed on the net taxable income derived from French operations by all corporations and other limited liability companies doing business in France (CGI, art. 219(I)). Unlike individuals, the corporate income tax is imposed only on French operations; consequently, income derived from foreign operations is, subject to contrary provision in a double taxation treaty and certain exceptions concerning tax haven operations, normally not subject to French income tax upon its realization, nor upon its repatriation. 


 Although recognized as separate legal entities for many purposes, general partnerships (sociétés en non collectif), civil companies (societies civiles), economic interest groups (groupements d’intérêt économique), single shareholders limited companies (know as enterprise unipersonnelle à responsabilité limitée)  and joint ventures (societies en participation) are not deemed to be taxable entities (CGI, art. 8). These entities, except for economic interest groups, may elect to be subject to corporate income tax. In addition, limited liability companies  consisting of individual shareholders who all have direct familial ties may elect to be deemed transparent for tax purposes. Thus, each partner thereof, be such partner an individual or a company, is separately subject to income tax on its pro rata share of the partnerships net taxable income, whether or not such income is actually distributed (CGI, arts. 8 and 60). Similarly, each partner may deduct its pro rata share of the partnerships losses from its taxable revenue (CGI, art. 156).