Taxation in France is determined by the yearly budget vote by the French Parliament The French Parliament or Parliament of France is the deliberative and legislative branch (parliament) of the Government of France. The current parliamentary system in France is bicameral, and the Parliament is composed of:, which determines which kinds of taxes (or quasi-taxes) can be levied and which rates can be applied.

Overview

In France, taxes are levied by the government, and collected by the public administrations. French "public administrations" are made up of three different institutions:

• the central government, i.e. the national government or the state ("l'État") strictly speaking, plus various central government bodies. It has a separate budget (general budget, special Treasury accounts, special budgets). It collects most of the taxes.
• local governments, which include agencies with limited territorial jurisdiction, such as local authorities, local public establishments, chambers of commerce and all public or quasi-public bodies financed primarily by local governments. They collect many taxes, but their weight is rather limited compared to that of central government.
• social security association (ASSO), is private organizations endowed with a mission of public service (even though they behave to a large extent like public administrations). Their budget is made up of all mandatory social security funds (general scheme, unemployment insurance schemes, complementary retirement funds and welfare benefit funds, funds for the liberal professions and agricultural funds, special employee schemes) and the agencies financed by such funds (social works, public and private sector hospitals contributing to public hospital services and financed from an aggregate operating grant). They are mostly financed by social contributions, collected for the sole purpose of social welfare.

Taxes in France are made up of taxes in the narrow meaning of the word, plus social security contributions. Most of the taxes are collected by the government and the local collectivities, while the social deductions are collected by the Social Security. There a distinction to be made between taxes (impôts), which applies to production, importations, wealth and incomes, and social contributions (cotisations sociales), which are part of the total wage paid by an employer when he remunerates an employee. Taxes and contributions together are called in French prélèvements obligatoires (compulsory deductions).

Is subject to French tax people having their tax domicile in France, i.e. natural or legal persons either living in France, i.e. who have their homes or their principal residence in France; working in France; having the center of their economic interests in France., Only one of these criteria is sufficient for a person to be treated as taxable.

Despite a downward trend registered since 1999, the tax burden in 2007 (43.3% of GDP) remains at a high level, both historically and in comparison with other countries. OECD countries have experienced an increase in the tax burden since the mid-60s comparable to that of France, rising from 25% of the GDP in 1965 to 36% in 2005. That of the countries of the European Union has increased by nearly 12 percentage points of GDP over the period. Efforts to control the increase in the tax burden have been made by the states of the OECD: the tax rate decelerated during the 90s and has decreased slightly since 2000. This is why France continues to be among the OECD countries whose tax rate is the highest. Taxes account for 45% of GDP against 37% on average in OECD countries. The overall rate of social security and tax on the average wage in 2005 was 71.3% of gross salary, the highest of the OECD. The levels of social security contributions are particularly high (16.3% of revenue against 9.4% in average for OECD). The social security budgets are larger than the budget of the national government. The budgets of both the national government and of social security organizations run deficits.

List of taxes

There are many taxes in France. They can be classified according to the institution which collects and benefit from them and to the people who pay them. Taxes are monetary benefits imposed on people according to their capacities and without return of benefit, for the purpose of public expenditure is to achieve economic and social goals set by the government. As for tariffs A tariff is a tax levied on imports or exports, they are different from taxes because of their strictly economic aspect; their purpose is to protect the domestic market A domestic market is a financial market. Its trades are aimed toward a single market. A domestic market is also referred to as domestic trading. In domestic trading, a firm faces only one set of competitive, economic, and market issues and essentially must deal with only one set of customers, although the company may have several segments in a. However, some charges levied by the customs Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, personal effects and hazardous items in and out of a country. Depending on local legislation and regulations, the import or export of some goods may be restricted or forbidden, and the administration are taxes: the value added tax Value added tax is similar to a sales tax. It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer. Maurice Lauré, Joint Director of the French Tax Authority, the Direction générale des impôts, was first to introduce VAT on April 10, 1954, levied on goods from non-members of the European Union The European Union is an economic and political union of 27 member states which are located primarily in Europe. Committed to regional integration, the EU was established by the Treaty of Maastricht in 1993 upon the foundations of the European Communities. With over 500 million citizens, the EU combined generated an estimated 28% share (US$ 16.5, the tax on petroleum products, which applies regardless of the origin of products, and other taxes. Finally, although they are compulsory, social security contributions Payroll tax generally refers to two different kinds of similar taxes. The first kind is a tax that employers are required to withhold from employees' pay, also known as withholding, pay-as-you-earn , or pay-as-you-go (PAYG) tax. The second kind is a tax that is paid from the employer's own funds and that is directly related to employing a worker, are not taxes as they are collected for one purpose - social protection The United Kingdom, as a welfare state, was prefigured in the William Beveridge Report in 1942, which identified five "Giant Evils" in society: squalor, ignorance, want, idleness and disease - and as the taxpayers might benefit from these expenses. Some other taxes, based on personal income, are allocated to social agencies and do not give taxpayers the right to benefit from them.

Taxes on production and importation

These taxes, collected by public administrations or by the institutions of the UE, apply to the production In microeconomics, industrial organization is the field which describes the behavior of firms in the marketplace with regard to production, pricing, employment and other decisions. Topics in this field range from classical issues such as opportunity cost to neoclassical concepts such as factors of production and the consumption Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined by opposition to production. But the precise definition can vary because different schools of economists define production quite differently. According to some economists, only the final purchase of goods and of goods and of services. These taxes are independent from profits In neoclassical economics, economic profit, or profit, is the difference between a firm's total revenue and its opportunity costs. In classical economics profit is the return to the employer of capital stock in any productive pursuit involving labor. These two definitions are actually the same. In both instances economic profit is the return to an. They include taxes on the products and others taxes on the production. The taxes on the production cover essentially the taxe professionnelle, the taxe foncière and the versement transport (the professional tax, tax land and the payment transport), which apply to the use of labour and the property or the use of land, buildings and other assets used for the sake of production. They are local taxes, so they are not collected by the central government (see Local taxes). Taxes on consumption Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined by opposition to production. But the precise definition can vary because different schools of economists define production quite differently. According to some economists, only the final purchase of goods and traditionally consisted of indirect duties on the consumption and excise duties An excise or excise tax may be defined broadly as an inland tax on the production or sale of a good, or narrowly as a tax on a good produced within the country. Excises are distinguished from customs duties, which are taxes on importation. Excises, whether broadly defined or narrowly defined, are inland taxes, whereas customs duties are border, applying only on the use of certain products (alcoholic beverages, manufactured, tobacco products and energy products). However, the establishment of the VAT and its generalization have considerably reduced the scope and thus the revenue of these indirect duties and exise duties even if one of them, the tax on petroleum products, has still a very important weigh. The revenue from the excise duties amounted in 2007 to 2.7 billion euros, without the TIPP.

Tax on the added value (VAT) In order to establish a single market made up of the member states of the European Union The European Union is an economic and political union of 27 member states which are located primarily in Europe. Committed to regional integration, the EU was established by the Treaty of Maastricht in 1993 upon the foundations of the European Communities. With over 500 million citizens, the EU combined generated an estimated 28% share (US$ 16.5, a number of directives on VAT Value added tax is similar to a sales tax. It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer. Maurice Lauré, Joint Director of the French Tax Authority, the Direction générale des impôts, was first to introduce VAT on April 10, 1954, has been enacted since 1967, with the obligation for states to adapt their domestic legislation . The rules relating to the scope, the tax base To tax is to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law, the payment, the territoriality of goods and services as well as reporting requirements are partially harmonized, but states can apply transitional arrangements in respect of rates, exemptions and rights of deduction, whose rules are being harmonized.

The VAT is a general consumption tax A consumption tax is a tax on spending on goods and services. The term refers to a system with a tax base of consumption. It usually takes the form of an indirect tax, such as a sales tax or value added tax. However it can also be structured as a form of direct, personal taxation: as an income tax that excludes investments and savings. A direct, which applies to goods and services located in France. It is a proportional tax on output collected by the companies In the United States, a company is a corporation—or, less commonly, an association, partnership, or union—that carries on an industrial enterprise." Generally, a company may be a "corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and any receiver, and ultimately completely supported by the final buyer, i.e. the consumer, since it is included in the price of goods or services. Indeed, VAT is applied to the "added value", i.e. the added value to the product or service at each stage of production or marketing, so that at the end of the economic circuit, the overall tax burden In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall" upon the group that, at the end of the day, bears the burden of the tax. The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on corresponds to the tax calculated on the final price paid by the consumer. The current standard rate is at 19,6%. The reduced rate (for food and books) is 5.5% . A specific rate of 2,1% applies only to the drugs taken in charge by the Social Security. The net revenue of VAT in 2008 is 126 billion euros.

Tax on petroleum products The taxe intérieure sur les produits pétroliers (TIPP) applies to petroleum products According to crude oil composition and demand, refineries can produce different shares of petroleum products. Largest share of oil products is used as energy carriers: various grades of fuel oil and gasoline. Refineries also produce other chemicals, some of which are used in chemical processes to produce plastics and other useful materials. Since according to fixed rates provided by the legislation. It applies only in France : in the overseas territories The French Overseas Departments and Territories consist broadly of French-administered territories outside of the European continent. These territories have varying legal status and different levels of autonomy, although all have representation in the Parliament of France (except those with no permanent inhabitants), and the right to vote in, there is a special consumption tax (TSC) on premium and diesel Diesel fuel in general is any liquid fuel used in diesel engines. The most common is a specific fractional distillate of petroleum fuel oil, but alternatives that are not derived from petroleum, such as biodiesel, biomass to liquid (BTL) or gas to liquid (GTL) diesel, are increasingly being developed and adopted. To distinguish these types,. It paplies to motor fuels and heating fuels, such as petrol and gasoline, electricity, natural gas, coal and coke. In the face of the rise in oil prices, a reduction in the rate of the TIPP for fuel sold to consumers was adopted by the Parliament in 2006. The TIPP is collected by the services de la direction générale des douanes et des droits indirects (DGDDI) when petroleum products are consumed on the domestic market. The revenue from the TIPP amounted to 20 billion euros in 2008. Petroleum products are subject to both the tax on petroleum products (TIPP) and the value added tax (VAT). The TIPP is also included in the taxable amount of petroleum products subject to VAT.

Taxes on wealth

Wealth Wealth is the abundance of valuable resources or material possessions or the control of such assets. The word wealth is derived from the old English wela, which is from an Indo-European word stem. An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy may be subject to taxation when transmitted for sale or for free (gift, inheritance Inheritance is the practice of passing on property, titles, debts, and obligations upon the death of an individual. It has long played an important role in human societies. The rules of inheritance differ between societies and have changed over time). In these cases, inheritance or gift tax may be payable (known as droits de succession) in France.

In addition, it may be taxed when owned: wealth is subject to annual taxation through the impôt de solidarité sur la fortune (ISF) and local property taxes are payable on real estate. Capital gains is payable when assets are disposed of, but this tax is a tax on the profit.

Stamps acts The taxes called droits d'enregistrement, correspond to the stamp acts A stamp act is a law enacted by government that requires a tax to be paid on the transfer of certain documents. The stamp act was considered unfair by many people. Those that pay the tax receive an official stamp on their documents. The tax raised, called stamp duty, was first devised in the Netherlands in 1624 after a public competition to find a. They mainly apply to the sale of buildings (in addition to local taxes), inheritance and gifts, assignment of businesses and registration of vehicles. Revenues collected by the state amounted in 2006 to 14.7 billion euros.

Wealth Tax

Wealth Tax (solidarity tax on wealth The solidarity tax on wealth is a French annual direct wealth tax on those having assets in excess of €770,000 (as of 1 January 2008). It was one of the Socialist Party's 1981 electoral program's measures, titled 110 Propositions for France), in French impôt de solidarité sur la fortune (ISF) is an annual tax payable by individuals the net value of whose wealth exceeds a certain amount. It was established in 1989 to finance the RMI The Revenu minimum d'insertion is a French form of social welfare. It is aimed at people without any income who are of working age but do not have any other rights to unemployment benefits (e.g. contributions-based unemployment benefits). It was created in 1988 by Jean-Michel Belorgey by the government of Michel Rocard (Socialist Party) and aimed. In 2008, the return of ISF amounted to 4.5 billion euros.

Individuals who are resident in France are taxed on their worldwide assets and individuals who are resident outside France under French law are taxed on their assets in France. The tax is set for each household (married couples or partners, persons cohabiting, plus minor children). The tax base includes all property Property is any physical or intangible entity that is owned by a person or jointly by a group of persons. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy their property, and/or to exclude others from doing these things. Important widely recognized types of, rights and values that constitute the wealth of taxpayers at 1 January of the relevant tax year (buildings built or not, individual businesses, farms, movable furniture, financial investments, debts owed to you, automobiles, aircraft, pleasure boats ,...). However, certain assets are wholly or partially exempted (mainly professional property, i.e. individual companies, rights on literary and artistic works held by the author, some rural property, objects and antiques, artwork or collectibles).

Individuals resident in France are entitled to a deduction of 30% against the value of their main home for wealth tax purposes.

If you are resident in France, you can potentially reduce your wealth tax bill due to the restriction that applies to the amount of combined income tax, wealth tax, social charges (CSG and CRDS) and local property taxes that can be taken from your taxable income.

This restriction is known as the Bouclier Fiscal or tax shield, and limits these taxes to no more than 50% of your taxable income.

On 6^th August 2008, France enacted a law that entitles all those who have been non-resident in France for the five previous years, to exclude their non-French assets from wealth tax for the first five years of their residence in France.

While this minor tax applies only to the most wealthy of the population, and actually collects very little revenue (2% of overall tax revenue), it is very controversial. Many people on the political left In politics, left-wing, leftist and the Left are generally used to describe support for social change with a view towards creating a more egalitarian society. The terms Left and Right were coined during the French Revolution, referring to the seating arrangement in parliament; those who sat on the left generally supported the radical changes of consider it a symbol of solidarity, while many on the right In politics, right-wing, rightist and the Right are generally used to describe support for social stratification with the preservation of traditional social orders and values. The terms Right and Left were coined during the French Revolution, referring to seating arrangements in parliament; those who sat on the right supported preserving the argue that it encourages entrepreneurs An entrepreneur is a person who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome.[note 1] The term is originally a loanword from French and was first defined by the Irish economist Richard Cantillon. Entrepreneur in English is a term applied to the type of personality to leave France.

Succession and Gift Taxes

These taxes, known as Droits de Succession et de Donation, apply to both gifts and inheritances. The taxes apply where:

(a) The donor/deceased is resident in France at the date of the gift/death.

(b) The recipient is resident in France and has been so resident for at least 6 of the 10 tax years prior to the year in which the gift/inheritance is received.

(c) The asset is a French asset.

These provisions can be overridden by a Tax Treaty.

Tax is payable by the recipient, based on the amount received and their relationship with the donor or deceased.

Assets passing on death between spouses and PACS partners are now exempt from French succession tax, but gifts are still taxable between spouses and PACS partners.

As for wealth tax, the value of your main home can be reduced by 30% for succession tax purposes provided the property is also occupied as a main home by the surviving spouse or by one or several children. PACS partners can also benefit from the 30% deduction.

The tax rates for 2010 are as follows:

Allowances are available, and the main ones are:

PACS Partners

In France, unmarried couples (whether hetero- or homosexual) can enter into a PACS (Pacte Civil de Solidarite) agreement.

The PACS is a written agreement which can now be achieved by going before a Notaire who then registers it with the authorities. The relations between the partners are similar to those of husband and wife.

A PACS can be entered into by:

- any couple living in France of whatever nationality, AND - any couple living outside of France, provided at least one of them is a French national

The tax position for PACS partners is now aligned with that of a married couple. For income tax purposes, the couple is assessed to income tax as a household from the day the PACS agreement takes force.

For succession tax, the surviving PACS partner is exempt from tax on inheritances. For gifts, the allowance is now €79,533 and the tax rates are as for married couples. If a PACS agreement is broken before the end of the year following the year it was entered into, for motives other than marriage of the couple or death of one of the partners, the allowance will be denied and the tax relief clawed back.

As of 14 May 2009, France recognises most foreign Civil Partnerships as equivalent to a PACS.

Taxes on incomes

In France there are three categories of taxes on income: the corporate tax Corporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level in a particular jurisdiction. Such taxes may include income or other taxes. The tax systems of most countries impose an income tax at the entity level on certain type of entities (company or corporation). Many systems additionally tax owners or, the income tax An income tax is a tax levied on the income of individuals or business . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual for individuals and taxes for social purposes (CSG and the CRDS, paid by the households). Taxes paid by employers on wages, namely social contributions, are not considered as taxes by the French central government.

Income tax The impôt sur le revenu (IR) is a tax on all income available to individuals in a year. With certain exceptions, net income is determined from total income, whatever its origin, after applying certain deductions, and then a single scale of taxation is applied. This scale is characterized by rates applied to slices of income according to the principle of progressivity A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate. It can be applied to individual taxes or to a. However, there are numerous provisions, so there are many systems of taxation depending on the type of income received. In addition, some income and capital gains are subject to a fixed rate of tax. The IR is payable each year on the total taxable income of the household. In 2007, proceeds from the IR amounted to 57 billion euros.

The income subject to IR is divided into seven categories: industrial and commercial profits, non-commercial and agricultural profits, land income, salaries and wages, pensions and annuities, movable income, and capital gains. Individuals' total income is taxed if they are resident in France, whether they have French nationality or not. Individuals not living in France are taxed only on their income from French sources. The tax is calculated for each "fiscal household", i.e. the family unit composed of either a single person, or two partners and their children or other dependents. The tax base is made up of the sum of the incomes of all the individual members of the household. Whatever the nationality, a person who is a tax resident in France is taxable on their worldwide income. People not living in France are subject to limited tax on their income from French sources only.

Exemptions are made for social reasons. Taxpayers whose net income does not exceed €7,920 are exempted from the IR. In principle, taxable income is calculated from the income available to a fiscal household in one year. Some expenses by the household tax are deductible from total income. There can be cuts and maximum taxable amounts of the income.

The income tax is calculated by the administration based on the amounts reported by taxpayers who are required to declare their whole income earned during the previous year. But the calculation of income tax takes into account the personal situation of the taxpayer, in particular through the "family quotient" on the one hand and in the allocation of reductions or tax credits to taxpayers, on the other hand. The family quotient can take into account family responsibilities and, according to them, eases the effects of progressive taxation since the progressive rate is applied to a partial income (the taxable income). This process consists of dividing the taxable income of the household tax into a number of shares (or parts) equal to the number of individuals. The progressive scale of tax is then applied to taxable income per share. Finally, this partial tax is multiplied by the number of shares to determine the taxable base.

The family quotient is one part for a single person, two for a married couple, plus an extra half for each of the first two children and an additional part for each child from the third.

There are certain limitations to the amount of tax savings that can be achieved under the parts system. If the system produces a tax bill which has been reduced by more than Є2,301 (for 2009 income) per half part compared to what it would have been without reference to the parts, you are not allowed to use this system. You will always receive 2 parts for a married couple notwithstanding.

Various tax credits are available to set against the total tax calculated. These include tax credits for dividends, energy-saving work carried out on the main residence, purchase of an environmentally friendly car, employment of home help, child minding expenses, for filing tax returns electronically and paying tax by direct debit or electronically, for mortgage interest, among others.

Corporate tax The corporate tax Corporate tax or company tax refers to a tax imposed on entities that are taxed at the entity level in a particular jurisdiction. Such taxes may include income or other taxes. The tax systems of most countries impose an income tax at the entity level on certain type of entities (company or corporation). Many systems additionally tax owners or, in French impot sur les societes (IS), is an annual tax in principle that affects all profits made in France by corporations A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business and other entities. It concerns about one-third of French companies. The standard rate is 33.1% for all of their activities. In 2006, the net proceeds from corporation tax amounted to 47.8 billion euros. The taxable income is equal to the difference between gross profit In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Note that this is different from operating profit and costs and deductible expenses. The gross operating profit In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Note that this is different from operating profit is made by the difference between sales and costs. In addition to the gross operating profit, all income or profits made apart are normally taxable: income from the rental of property, interests, deposits and bonds.

Social Taxes Since its creation in 1945, the Social Security is mainly financed by social contributions or "social cotisations", i.e. deductions from wages. Until recently, there was no wide taxation on social expenditure, contrary to most of its European partners. However, in order to find a solution to the problems of financing of the social security, governments have had to broaden its range of resources by the introduction of additional tax, notably the general social contribution (CSG) and the repayment of the debt of social security (CRDS) at a rate of 0.5%, to repay the debt of the ASSO.

Established by the Finance Act 1991, the general social contribution (CSG) is payable by individuals living in France and who benefit from the compulsory health insurance. Revenues from the CSG are allocated to social security budget, specifically to the National Family Allowance, the Solidarity Fund pension schemes and insurance. Indeed, unlike the social contributions that give those who pay a right to benefit from them, the CSG, is levied without direct compensation(like any other tax). The CSG has a very broad base as it applies in principle to earnings and income from wealth. The CSG is composed of three separate contributions. Incomes from work are taxed at 7,5 %. The rate applied to income from investments is 8.2%. It also applies to financial investment (with exceptions for certain untaxable products : Codevi, livret jeune, livret A, livret d'epargne populaire). In 2005, the revenue from the CSG amounted to 71.47 billion euros.

The contribution to the social debt (CRDS) was created in 1996. Like the CSG, it applies to earnings and to income from wealth. It was initially established for a period of 13 years, but this time limit was abolished in 2004. The territorial scope of the CRDS is the same as the CSG: thus, CRDS is paid by individuals living in France who benefit from a compulsory insurance scheme. The rate is 0.5%. The base of the CRDS is somewhat broader than the CSG, for it includes incomes exempted from CSG such as family benefits or housing allowances. The methods of recovering the CRDS are identical to those of the CSG. CRDS is not deductible from the tax base for tax on income. The yield for the year 2005 is 5.2 billion euros.

In summary, the social charges are made up of four elements: the CSG, CRDS, PS and RSA. The amounts are different for each type of income, and the position can be summarized below:

There are no allowances on reliefs other than being able to deduct a proportion of the social charges payable on income taxed at the scale rates against earned or pension income. Thus, where income or gains are taxed at fixed rates, no deduction is available.

Local taxes

There are a huge number of local taxes. The most important are direct taxes. The local direct taxes are oldest taxes of the French tax system, as they succeed to direct contributions that were created in 1790 and 1791 as taxes collected by the central government then transferred to local authorities at the occasion of the tax reform of 1917. Local taxes are levied by the state for local authorities (regions, departments, municipalities, local public institutions). There are four main direct taxes (taxe foncière sur les propriétés bâties, la taxe foncière sur les propriétés non bâties, taxe d'habitation and taxe professionnelle). The rates are set by the territorial assemblies (regional or municipal councils) when they vote their annual budget. However, rates can not exceed certain limits set by the state. The tax bases are established by the state. There are many permanent or temporary exemptions. In 2006, the revenue from the four major local direct taxes amounted to 60.2 billion euros. Apart from these four main taxes, there are many other taxes. Direct taxes include the Taxe pour frais de chambres d'agriculture (expense of the chambers of agriculture), the Taxe d'enlèvement des ordures ménagères (garbage collection), and the taxe sur les pylônes. Indirect taxes are taxes applying to spring water, mines, spectacles, advertising, navigation, electricity, pollution and workplace.

Professional tax The professional tax is due each year by legal persons or natural persons who are self-employed in France. Various exemptions are provided (activities performed by the State, local authorities and public institutions, business and agricultural organizations, etc.). The tax base is constituted by the rental value of assets available to the taxpayer. The is then subject discounts or rebates. The amount of business tax is calculated by multiplying the taxable net by the rates approved by each local beneficiaries. The rates are set by the local communities and organizations, within limits set by national legislation. In 2005, proceeds from the business tax amounted to 25.06 billion euros.

Housing tax The housing tax applies to all building sufficiently furnished and their dependencies (gardens, garages, private car parks): the tax is payable by any person who has a residential unit at one's dispossal, for any reason (owner, renter, occupant for free). The tax base is the cadastral rental value of the residential property. In 2005, the revenue from the housing taxes amounted to 13.37 billion euros.

Land tax The property tax on built lands is applied to properties built in France. The taxable properties consist of all permanent construction, i.e. buildings (blocks of flats, houses, workshops, warehouses, etc.). The tax base is the cadastral income, equal to 50% of the cadastral rental value of the building (i.e. the value set by the administration). For social reasons, there are many exemptions and exceptions. In 2005, the product amounted to 17.73 billion euros.

Taxes by source

In 2007, revenues amounted to 818.9 billion euros, or 43.3% of GDP.

There are four beneficiaries of the tax revenues: in 2007, social security administrations have received just over half; the state and the central government bodies near a third; the local administrations (APUL) nearly 13%; the European Union (EU) less than 1%. Direct and indirect taxes account for 62.8% of total revenues in 2007. State resources come almost entirely from taxes. The social security bodies are financed largely by social contributions but also by taxes, including the general social contribution (CSG) and the contribution for the repayement of the social debt (CRDS), which represented in 2007 a quarter of the funding of the Social Security administrations. Local administrations are mostly financed by the four main local direct taxes (housing tax, property taxes and business tax).

Public finances

The public deficit amounted to 2.9% of the GDP (€ 50.6 billion) in 2007 compared to 0.2% on average in the euro zone, excluding France. The actual deficit may exceed the threshold of 3% if the situation deteriorates. The public debt amounted in 2007 to 63.9% of GDP, which represents 47 000 € per person employed. Public debt Government debt is money (or credit) owed by any level of government; either central government, federal government, municipal government or local government. By contrast, annual government deficit refers to the difference between government receipts and spending in a single year. Debt of a sovereign government is called sovereign debt has increased in the last years, and the expenditures to repay the interests have reached 52 billion € in 2007 or 2000 € per person in employment.

The deficit of social security administrations remains at € 11bn, but the corresponding debt ("social debt") has increased. The deficit of local administrations is still limited, but amounted to 7 € bn in 2007, as a result of a spending growth significantly higher than that of the revenue in the reent years. As for the net tax revenue of the central government, it remained in 2007 at the same level as in 2004, whereas the total revenues rose by 51 billion € since 2004, because of increasing transfers of reveues to social security and local authorities to reduce their deficit (€70 bn in 2007). In 2007 France's central government took in revenues of approximately €272 billion and had expenditures of €354 billion. Overall, the government registered a deficit of approximately €42 billion.

Although deficits have been commonplace, efforts have been made in recent years to cut back the growth of taxes and government spending. Deficit reduction became a top priority of the government when France committed to the European Monetary Union A monetary union is an arrangement where several countries have agreed to share a single currency amongst themselves. The European Economic and Monetary Union consists of three stages coordinating economic policy, achieving economic convergence (that is, their economic cycles are broadly in step) and culminating with the adoption of the euro, the. The Maastricht Treaty The Maastricht Treaty was signed on 7 February 1992 by the members of the European Community in Maastricht, the Netherlands. On 9–10 December 1991, the same city hosted the European Council which drafted the treaty. Upon its entry into force on 1 November 1993 during the Delors Commission, it created the European Union and led to the creation of targets for the EMU required the members countries to reduce the government's budget deficit to 3% of GDP and the public debt to 60% of GDP.

Recent evolution

The evolution of the level of the tax burden since the early 70s can be divided into three distinct phases. First, during the 70s and in the first half of the 80s, the tax rate has increased from 34% to 42%. Then it stabilized at a rate close to 42% until the early 90s, when he has resumed its growth rate to the historical height of 44.9% in 1999. Since then, the rate of PO government has declined slightly to between 43% and 44% of the GDP.

Over the last decades, the distribution of tax burden between the three main administrations has changed significantly. The share allocated to the state has tended to decline, while that allocated to the social security institutions and local governments has grew. The higher tax rate of social security is due to the general upward trend of social spending, particularly the higher spending on pension and health assuarnce system. The pension expenditure grew from 11% of the GDP in 1981 to 13% in 2007, and health spending increased from 6% of the GDP to 10% in 2006 over the same period.

In this context, the structure of the funding of the social security administrations has been more and more assured by taxes rather than social contributions. In particular, new taxes were levied to help fund the social security administrations, such as the general social contribution (CSG) and the contribution for the repayment of the social debt (CRDS). More recently, the central government has help funding the social security administrations by the revenues from the excise on alcohol and tobacco, in part to offset reductions in social contributions. As for the growth of the revenues for the benefit of local administrations, it is only due to the devolution, begun with the 1992 laws, and continued with the reforms in 2003.

History of taxes in France

The tax system has never been united in France. There have always been an extreme diversity in collection, the base, the rates and the nature of the taxes. Until 1789, taxes were collected by the state, the church and lords. After the French revolution, taxes consisted of taxes on wealth and on incomes. The current tax system was shaped during the twentieth century. All taxes created under the French Revolution were abolished, the last being the patentes, abolished in 1974. Whereas taxation aimed at assuring "the maintenance of the public force" and "the expenditures of the administrations"(Déclaration des droits de l'homme et du citoyen de 1789), taxation is now aiming at assuring efficient public services and a fair distribution of the wealth and the income.

Historically, most taxes have been paid either or in shares of harvest (dime and champart) or work (corvée, military service). Gradually, each of these taxes has been replaced by a cash contribution for being more convenient for both the beneficiary and the taxpayer. The taille, created in the fourteenth century, was one of the oldest taxes levied by the French monarchy. It was replaced by the fouage. Under the Old Regime, the collection of taxes was leased, i.e. that the State entrusted the task to entrepreneurs, big farmers, who paid the amount of the tax to be levied, then levied the tax for themselves. The system was convenient for the both the state (the revenue was anticipated and it was disposed of the unpopularity of tax collectors) and for big farmers (the bargain was very profitable). However, the people considered the collection mainly a source of injustice and excesses.

Some notable indirect taxes under the Old Regime were the aides (indirect taxes collected by the state, applying to beverages), the banalités (tax imposed by the lords for the use of mills, ovens and wine presses), the casuel (collected by the Church at baptisms, marriages and funerals), the cens (tax collected by the lords, for the use of their land), the champart (collected by the lords, paid by an amount of the crops of grains), the dîme (collected by the church, applying to all the lands), the gabelle (collected by the king, for the consuption of salt), the minage (collected by the king or the lords, for the sales of grains at fairs and markets). There were three direct taxes, created between the fifteen and the eighteen centuries: the taille, the capitation and the dixième. The taille The taille was a direct land tax on the French peasantry and non-nobles in Ancien Régime France. The tax was imposed on each household and based on how much land it held, created in the fifteen century and used for more than three centuries, applied to incomes from ownership Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. The concept of ownership has existed for thousands of years and in all cultures, housing A house is a home, shelter, building or structure that is a dwelling or place for habitation by human beings. The term includes many kinds of dwellings ranging from rudimentary huts of nomadic tribes to free standing individual structures. In some contexts, "house" may mean the same as dwelling, residence, home, abode, lodging,, farm land and breeding Animal husbandry, also called animal science, stockbreeding or simple husbandry, is the agricultural practice of breeding and raising livestock. It has been practiced for thousands of years, since the first domestication of animals. The capitation, created in 1695,was a tax on property, in addition to the taille. The dixième, created in 1710, applied to all the income from any ownership (land, real estate, annuities), at a rate of 10% (dixieme meaning thenth). In 1749, it was replaced by the vingtième (twentieth, i.e. a tax with a rate of 5%).

The French Revolution transformed the tax system completely. The former system was abolished. The parliament, on behalf of the people, took control of the right to levy taxes (the sovereign loses this right), destroyed all statutes and tax privileges (of the nobility and clergy, but also the provinces, cities, corporations, etc.) planned to establish a fair proportional contribution and made these changes official in the Declaration of Human Rights and the Citizen of 1789. Four direct taxes were created in the late 1700s, applying only to wealth: the land contribution, the housing contribution, the patentes (industry and trade), and the contribution from doors and windows The window tax was a glass tax which was a significant social, cultural, and architectural force in the kingdoms of England, Scotland and then Great Britain during the 17th and 18th centuries. Some houses from the period can be seen to have bricked-up window-spaces , as a result of the tax.

Throughout the nineteenth century, taxes changed little. Taxes from the Revolution remained, i.e. taxes on wealth (taxes foncières) on the professional activity (the patente, ancestor of the taxe professionnelle), and many indirect taxes and "droits" applied to the trade of goods (inheritance, purchase of real estate). From the middle of the nineteen century, there were debates for the creation of an income tax, proposed by Proudhon in 1848, then by Gambetta in 1869. In 1872, a tax on incomes from real estate was created. In 1876, Gambetta rpoposed to create a proportional tax on all incomes. The only result is the creation in 1896 of a tax on incomes from the stock exchange.

Before 1914, taxes mainly applied to the wealth (wealth, land, inheritance) or incomes from wealth. The tax burden did not exceed 10%. Many propositions, successively from Doumer, Cavaignac and Waldeck-Rousseau, failed, due to the opposition of the right. It was the Great War which gave the opportunity to create a tax on income, in 1917, thanks to Joseph Caillaux, the minister of Finances. At the same time, the four contributions created in 1790 and 1791 were turned into local taxes, and replaced by the income tax as the main national tax.

After the Second Word War, the tax system underwent a certain number of reforms aiming at modernizing and adapting it.The income tax was adapted and old contributions abolished. A family quotient was created in 1945. The business tax was created in 1948, reformed in 1959. Finally, the last significant innovation in technical terms, the VAT was introduced in 1954. Then the French example was adopted gradually in most developed countries. Adopted throughout Europe, it will be unanimously considered the best tax to finance the governments of the European Union. The French tax system is currently controversial with the development of the European Union and globalization. Tax competition Tax competition exists when governments are encouraged to lower fiscal burdens to either encourage the inflow of productive resources or discourage the exodus of those resources. Often, this means a governmental strategy of attracting foreign direct investment, foreign indirect investment , and high value human resources by minimizing the overall has risen sharply, and it becomes necessary to take into account the legal possibilities to avoid paying taxes (the practice of expatriation is legal, unlike tax evasion).

French Taxation for UK Expats

UK expats moving to France will be liable to pay French tax on their worldwide income and gains if they become resident in France. French social charges are also payable on income and gains, and the rates vary depending on the type of income, with the top rate being 12.1%. Wealth tax is also payable on the individual’s worldwide assets, but only after five years. For the first five years UK expats are only assessed to French wealth tax on their French assets, and if the total value of French assets is below €790,000 (for 2010), no wealth tax is payable. French succession (or inheritance) tax is payable on worldwide assets if an individual dies as a resident of France, and due to the operation of the UK/France Double Tax Treaty covering inheritances, UK nationals are treated as domiciled in France if they die as French residents, which means that UK IHT can be avoided on all but UK assets.

See also

• Government of France The government of the French Republic is a semi-presidential system determined by the French Constitution of the fifth Republic. The nation declares itself to be an "indivisible, secular, democratic, and social Republic". The constitution provides for a separation of powers and proclaims France's "attachment to the Rights of Man and
• Economy of France The economy of France is a mixed economy which is the fifth largest in the world in nominal terms, behind the United States, Japan, China and Germany and the eighth largest by purchasing power parity. It is the second largest economy in Europe behind Germany in nominal terms and fourth largest behind Germany, United Kingdom and Russia by PPP. On

References

• colloc.bercy.gouv.fr Finances locales
• http://douane.gouv.fr/menu.asp?id=126 The VAT on the customs website
• http://douane.gouv.fr/menu.asp?id=246 various customs
• http://www.budget.gouv.fr/themes/douane/droits_indirects/index.htm Indirect duties
• http://www.budget.gouv.fr/themes/impot_fiscalite/index.htm Overview of taxes
• ec.europa.eu Taxation in the European Union
• ec.europa.eu Taxation and Customs Union
• ec.europa.eu Excise duties on alcohol, tobacco and energy
• http://www.insee.fr/fr/methodes/default.asp?page=definitions/liste-definitions.htm
• http://vosdroits.service-public.fr/particuliers/N13.xhtml Impots, taxes et douanes
• http://www.impots.gouv.fr/portal/dgi/home?pageId=home&sfid=00
• http://www.impots-service.net/
• http://www.minefi.gouv.fr/paca/minefi_relais_sociaux/impots/impots.html Taxes
• L’impôt en France aux XIXe et XXe siècles
• http://doc.impots.gouv.fr/aida/Apw.fcgi?FILE=Index.html
• http://www.juri-logement.org/les_textes/2007/IF-14mai2007LogtsVacants.htm The housing tax
• http://www.secteurpublic.fr/public/article/taxe-interieure-de-consommation-sur-les-produits-petroliers-(tipp).html?id=9130
• http://www.ag2rpro.com/kiosque/Reperes.aspx Les taux de cotisations soiales 2008
• senat.fr Les prélèvements obligatoires et leur évolution
• senat.fr Quels prélèvements obligatoires ? Pour quels besoins collectifs ?
• assemblée-nationale.fr l'évolution des prélèvements obligatoires pour 2003
• Code général des impôts
• http://www.blevinsfranks.com French Taxation for UK Expats

External links

• The French tax system: main characteristics, recent developments and some considerations for reform on oecd.org

Categories: Taxation in France | Taxation by country

Personal tools

• New features
• Log in / create account

Namespaces

• Article
• Discussion

Variants

Views

• Read
• Edit
• View history

Actions

Search

Navigation

• Main page
• Contents
• Featured content
• Current events
• Random article

Interaction

• About Wikipedia
• Community portal
• Recent changes
• Contact Wikipedia
• Donate to Wikipedia
• Help

Toolbox

• What links here
• Related changes
• Upload file
• Special pages
• Permanent link
• Cite this page

Print/export

• Create a book
• Download as PDF
• Printable version

Languages

• Français

• This page was last modified on 3 May 2010 at 12:30.
• Text is available under the Creative Commons Attribution-ShareAlike License ; additional terms may apply. See Terms of Use for details.
  Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.
• Contact us

• Privacy policy
• About Wikipedia
• Disclaimers

See Also:

• Taxation In the United States
• Category:Taxation In the United States: Encyclopedia
• Society: Law: Services: Lawyers and Law Firms: Taxation Law: Directory
• Society: Law: Services: Lawyers and Law Firms: Taxation Law: Asia: Directory
• Society: Law: Services: Lawyers and Law Firms: Taxation Law: Europe: Directory

What Links Here:

Recently Viewed Pages:

• Home
• IRS: Encyclopedia
• IRS: Answers
• Search Terms
• IRS: Images
• Referrers
• Tax Return: Answers
• IRS: Videos
• Answers
• Vivien Kellems: Encyclopedia

Most Popular Pages:

• IRS Publication 6209: Answers
• IRS Code 1201: Answers
• 1301: Answers
• 1201: Answers
• Search Terms
• Home
• IRS: Answers
• Dainik Jagran
• 8002: Answers
• Irs Reference: Answers

Related 'Taxation In France' Searches: