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Annual French tax declarations open

Filing is now open for the annual French tax declaration, with the deadline falling in either May or June, depending where you live.

Published: 11 April 2024 10:29 CEST
Updated: 13 April 2024 07:04 CEST

Annual French tax declarations open

Tax declarations are now open. Photo by Philippe HUGUEN / AFP

Thursday, April 11th marks opening day for the déclaration des revenus – the annual tax declaration that must be completed by almost everyone living in France, plus those living overseas who have income in France.

Declarations can be done online via the tax website impots.gouv.fr – and those filling out the declaration will notice that an extra questionnaire has been added at the end this year.

Everyone living in France must complete the declaration – even if they have no income in France. The only exception is a small group of salaried employees whose circumstances have not changed since last year – if you fall into this group, you will have already been notified by the tax office.

Those living outside France may have to complete a declaration if they have income in France, including income from renting out a holiday home or second home.

You can find a complete explanation of how to fill out the declaration HERE.

Check out our 2024 tax guide for everything that has changed this year.

There is more information HERE on the most common tax traps for foreigners in France.

And you can also check out our FAQs for answers to the most common questions, from currency exchange rates to the rules on foreign bank accounts.

The deadlines to have completed the declaration are;

May 20th – the deadline for anyone mailing a paper tax declaration
May 23rd, 11.59pm – the last date for online tax declarations for anyone living in the départements 01 to 19. This is also the date to file for people living outside of France.
May 30th, 11.59pm – the deadline for filing online for those in départements 20 to 54
June 6th, 11.59pm – closing date for online tax declarations for inhabitants of départements 55 to 96, and France’s overseas départements

For more information on French taxes, head to our Tax Guides section.

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Americans in France: Will my tax situation change if I get French citizenship?

Gaining French citizenship can have plenty of benefits for Americans living in France, from the right to vote in French elections to freedom of movement in the EU – as well as a more intangible sense of belonging in the country you now call home.

However, Americans living abroad always have to contend with the United States’ system of citizenship-based taxation, which requires US nationals to report their global income to the IRS yearly, however long they have been out of the country.

This may result in making two tax declarations every year if they move to a country – like France – which requires yearly declarations from all residents.

As a result, Americans have to think about possible tax consequences before making decisions to move, invest, or perhaps take on a second nationality.

To help answer the question of whether there are special tax ramifications for French-American dual nationals living in France, The Local spoke with tax expert Jonathan Hadida from HadTax.

Hadida said: “There is really no impact. You still have yearly reporting requirements to both countries, and from the French side you will still continue to give you the benefits of the tax treaty”.

Key items, such as your US-based pension, would continue to be taxed in the US and not France regardless of whether or not you take on French nationality too.

READ MORE: Ask the expert: What Americans in France need to know about 401(k) and other pensions

Unfortunately, many of the limitations Americans in France experience would also remain in place. French investment options, such as the Assurance Vie, would still unwise for dual nationals, as the IRS sees them as PFICs (Passive Foreign Investment Company).

While the Assurance Vie is a great tool for being tax efficient for non-Americans, and can offer alternatives to the regimented, traditional French inheritance process, for Americans living in France (including those with dual nationality) it can lead to lengthy and complicated dealings with the IRS.

“To the US tax authorities, you are still American first, second, third and fourth place. They don’t really care that you are also French,” Hadida said.

“The only real change to your tax situation would be giving up your American citizenship, but keeping your US citizenship in addition to French citizenship does not really change anything.”

What happens tax-wise if I renounce my American citizenship?

Renouncing US citizenship is not as simple as scheduling an appointment at a US embassy or consulate, paying the applicable fee, and declaring that one does not want to be American.

There are several factors to consider, and depending on your situation, in the long-run it might be more advantageous to hold onto your US citizenship to continue benefiting from certain parts of the US-France dual taxation treaty (PDF).

For others, keeping US citizenship might be onerous with its yearly reporting requirements, as well as the difficulty it can pose with putting money into French investment vehicles due to citizenship-based taxation and FATCA (US legislation that passed in 2010 to track money laundering).

While renouncing your American citizenship undoubtedly pushes you further out of the reach of the IRS, you should consider that you might owe an exit tax, if you are deemed a ‘covered expatriate’. Usually, this is only required of high-net worth individuals (worth more than $2 million).

According to the US expat tax site 1040 Abroad, this also includes people who failed to comply with tax obligations in the five years preceding their renouncement, as well as people who had “an average annual net income tax liability exceeding a specified threshold” (as of 2022, this number was set to $178,000).

People renouncing US citizenship can also be subject to a special inheritance tax on gifts made to US citizens or residents, following their renunciation.

READ MORE: How to renounce American citizenship in France – and why you might want to

You should also think about your US-based investments.

“You would no longer benefit from the tax treaty in the same way if you give up your US citizenship. For example, Article 24 of the treaty covers investment income, making it taxable in the US and giving you a deemed credit in France.

You would lose this benefit if you renounce, and this could make a big difference if the taxation level is lower in the US, as it often is with dividends or capital gains.

“Your IRA and pension plans will continue to be taxed in the US because this is based on where the pension is earned, not nationality, but you might have to start filing a non-resident tax return to the US after renouncing citizenship,” Hadida said.

The tax expert said that renouncing citizenship should be decided on a case by case basis.

“Every situation is different, and for some people it might not make sense to give up certain benefits from the US-France tax treaty. You should speak with a financial advisor before deciding”, he said.

READ MORE: Divorce, stress and fines: How citizenship-based taxation affects Americans in France

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