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SIMPLIFICATION OF THE TAXATION OF FRENCH EXPATRIATES

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The taxation of French citizens abroad will be simplified and made fairer in 2019. 

The National Assembly voted on Thursday for measures to simplify the taxation of French abroad. Including the principle of a non-liberal withholding tax as of 2020. The government intends to "bring the taxation regime" of French source income paid to non-residents closer to that applicable to residents. Via a government amendment to the 2019 budget proposal, the "flat-rate withholding tax" mechanism with a minimum tax rate of 20% applied to French-source income has been removed.

It has been replaced by a non-liberal withholding tax calculated by applying the default rate grid used for the withholding tax on residents' income.

A minimum rate raised on French income

In addition, the minimum tax rate applicable to French source income of non-residents will be increased from 20% to 30% in metropolitan France. Starting with the taxation of income for the year 2018. This minimum rate will be increased from 14.4% to 25% for income originating in the overseas departments. These measures are partly taken from a report by Anne Genetet (LREM) on the international mobility of French people, which was submitted to the government in September. They are taken "for the benefit of French people abroad," according to Public Accounts Minister Gérald Darmanin. Between 2 and 3 million French people live abroad today. These French people represent 0.6% of taxpayers but pay 1% of the country's income tax, according to Genetet.

Abolition of the CSG and CRDS

Gérald Darmanin, the Minister of Action and Public Accounts, has announced a number of measures designed to simplify and make fairer the taxation affecting French expatriates. Among these measures, included in the 2019 budget proposal, is the abolition of the CSG and CRDS. Indeed, these contributions are used to finance social protection. But the French affiliated with the social security system of another state do not benefit from them. However, this provision will only affect people living in an EU or EEA country or in Switzerland.

2 to 3 million French people living abroad

These measures to rebalance the taxation of French citizens abroad are partly taken from a report by Anne Genetet, MP for French citizens living outside France. In total, 2 to 3 million French people live outside of France. People who "wish to be considered as full members of the national community" and "want to benefit from a comparable tax system that takes into account their specificities".

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