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This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 Article 1 of the French tax code provides that taxes paid by a taxpayer cannot exceed 60% of his earnings. Taxes exceeding this threshold will be refunded.
Taxes included in this computation are personal income tax, wealth tax, and municipal taxes related to the main residence of the tax payer. The computation applies to the net income earned by taxpayer the year before the year of payment of the taxes.
Only taxes paid in France are included in this computation. Social contributions are excluded (CSG, CRDS and prélèvement social). Reimbursement will be granted only upon tax payer's claim.
This new provision applies to taxes paid from January 1st, 2006 onward.
The first claims will be filed starting January 1st 2007 for taxes paid in 2006.
As from 2008, the cumulated amount of income tax, social contributions, wealth tax and local taxes of the family house paid in France cannot exceed 50% of the taxpayer’s income. To calculate the 50% threshold, the incomes must be compared to the total amount of taxes and social contributions paid on these incomes plus wealth taxes and local taxes of the preceding years.
For 2008 the tax shield will apply on 2006 earnings and on taxes paid on these incomes in 2006 or 2007. Reimbursement will be done as of January 2008.
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