TL;DR:
- French taxation still imposes certain French income taxes even on non-residents, with specific tax brackets.
- Wealth optimization requires a precise knowledge of international conventions and structuring strategies.
- Effective management relies on a cross-reading of French and foreign rules to avoid over-taxation or omissions.
Many expatriates leave with the reassuring belief that once their tax residence is transferred abroad, France can no longer claim anything from them. This misconception can be very costly. Certain categories of French-sourced income remain taxable in France, sometimes at surprisingly high rates, and reporting obligations persist even thousands of kilometers from Paris. This guide offers a structured and educational explanation of the applicable rules: definition of status, tax brackets, wealth tax (IFI), capital gains on real estate, and social security contributions. Understanding these mechanisms is the first step towards informed international wealth management.
Key Points
| Point | Details |
|---|---|
| Non-residents taxed on income FR | As a non-resident, you are taxed only on income from French sources. |
| Minimum applicable rates | A minimum rate of 20% or 30% applies, unless a more favourable average rate is opted for. |
| IFI and assets | The IFI only concerns net real estate assets located in France above 1.3 million euros. |
| Tax treaty to be verified | Check the tax treaty between France and your country to avoid any double taxation. |
| Caution: Capital gains | Capital gains on real estate are taxed at 19 %, plus 17.2 % of social security contributions, or 7.5 % for a person affiliated with the social security system of an EEA country, Switzerland or the United Kingdom. |
Key principles of French taxation for non-residents
Having set the stage and dispelled misconceptions, let us examine the basic rules that structure the taxation of non-residents.
Who is considered a non-resident for tax purposes?
The concept of tax residence in France is defined by the’Article 4B of the French General Tax Code (CGI). A French tax resident is defined as anyone whose home or principal place of residence is in France, who carries out their main professional activity there, or whose center of economic interests is in France. If you do not meet any of these criteria, you are a non-resident for tax purposes. The consequences for your tax status are immediate.
THE French non-residents for tax purposes are taxable only on Their income is of French origin. In other words, your foreign income is not subject to French taxation, subject to applicable tax treaties. This rule stems from Article 4 A of the French General Tax Code (CGI); Article 164 B lists the types of income considered to be of French origin. This principle seems simple, but its practical application raises numerous questions.
What income is taxable in France?
Here are the main categories of French-source income subject to tax for a non-resident:
- Land income : rents received on real estate located in France
- Salaries and wages : remuneration paid for work physically carried out in France
- Pensions and retirement benefits : paid by French pension funds (CNAV, AGIRC-ARRCO, etc.)
- Capital gains on real estate : carried out during the sale of a property located in France
- Income from movable capital Dividends and interest paid by French companies
- Business profits : from a self-employed activity carried out in France
To learn more about the applicable tax details, the site economie.gouv.fr offers a useful summary.
Dividends paid by a French company to a non-resident are subject to withholding tax (Article 119 bis, 2 of the French General Tax Code). The rate is 12.8% when the beneficiary is an individual (Article 187 of the French General Tax Code). It increases to 75% when the dividends are paid in a non-cooperative state or territory.
The tax treaty signed with your country of residence may reduce or eliminate this withholding tax. If the rate stipulated in the treaty is less than 12.8% (%), you can request to benefit from it.
Comparative table resident vs non-resident
| Criteria | Tax resident | Non-resident for tax purposes |
|---|---|---|
| Taxable income | World Championships | French source only |
| progressive scale | Yes (from the first euro) | Minimum rate of 20% or 30% |
| Social charges | Yes | According to affiliation and agreement |
| IFI | World Wealth | Real estate assets in France |
| Annual Declaration | Form 2042 | Form 2042 NR |
Tax treaties play a central role. France has signed agreements with more than 120 countries to avoid double taxation. These agreements define which country has the right to tax which income, and under what conditions. Ignoring the treaty applicable to your country of residence means risking overpaying or underreporting your income.
Pro tip: If you live part-time between two countries or if your spouse resides in France while you are abroad, your situation may be more complex than it seems. Consult our guide to taxation of non-residents to verify your actual position before making any statement.
Tax rates and procedures specific to non-residents
Now that you know the scope, let's go into detail about the scales and options for optimizing actual taxation.
The minimum tax rate
For French-source income received in 2025 and taxable in France, declared in 2026, the minimum rate is 20% of the % taxable income up to €29,579, and 30% of the % taxable income above that amount, excluding specific rates for income from the French Overseas Departments (DOM). Tax is calculated according to the progressive tax scale with this minimum rate applied. The average rate can be requested when it is more advantageous; tax treaties and specific circumstances must be examined. Comparing these options requires a comprehensive overview of your situation: this is the purpose of our [document/guide/etc.]. wealth management for non-residents.
However, a valuable option exists: if you can demonstrate that your average tax rate calculated on all your worldwide income is lower than the minimum rate, you can request to be taxed at that average rate. This often represents substantial savings for non-residents whose French income is low relative to their overall income.
Scale of withholding tax on salaries and pensions
For salaries and pensions of French origin, a mechanism of specific withholding tax applies. This deduction is made directly by the employer or the French pension fund.
| Annual tranche after 10% allowance % — 2026 income | Withholding tax rate |
|---|---|
| Up to €17,275 per year | 0% |
| Above €17,275 and up to €50,112 annually | 12% |
| Above €50,112 per year | 20% |
This tax schedule applies to income received in 2026 (BOI-BAREME-000043) and is separate from the minimum tax rate. The brackets at 0 and 12 are final; the bracket at 20 is not. Reporting obligations remain, and an adjustment may be necessary, particularly if there are multiple payers. First, check whether the tax treaty grants France the right to tax the income. Specific rates apply to income from the French overseas departments and regions (DOM).
How to calculate your average rate: practical steps
- Consolidate all your global revenues : foreign salaries, rental income, dividends, pensions from all sources.
- Apply the French progressive scale to this global total as if you were a resident.
- Calculate the effective rate : theoretical tax divided by total global income.
- Compare this rate at the minimum rate of 20% or 30%.
- Opt for the average rate if it is weaker, by expressly mentioning it in your non-resident tax return.
France has signed tax treaties with more than 120 countries, which means that for the vast majority of expatriates, a treaty applies and can significantly change the tax treatment of certain income.
Pro tip: Never assume that the minimum tax rate applies automatically. Always compare the French minimum rate with your global average rate, and check whether your country of residence's tax treaty provides for an exemption or tax credit. Also, consult our article on non-resident tax status to fully understand the implications.
Deductible expenses: the European rule and exception
A non-resident cannot deduct any expenses from their total income: alimony and compensatory payments are not deductible (Article 164 A of the CGI).
There is one exception: "non-Schumacker residents". Three conditions must be met:
- you reside in another State of the European Union, or in a State of the European Economic Area linked to France by an administrative assistance agreement; ;
- your French-source income represents at least 75% of your worldwide taxable income; ;
- Your state of residence cannot take into account your personal and family situation due to insufficient income there.
You are then taxed as a resident: you deduct the same expenses, you benefit from tax reductions and credits, and the minimum rate of 20 % or 30 % does not apply.
Real estate wealth tax (IFI): what non-residents need to know
Beyond income tax, more and more non-residents are concerned about their real estate assets located in France, which are subject to the IFI (French wealth tax).
Plate and trigger threshold
The IFI (Real Estate Wealth Tax) replaced the former ISF in 2018. For non-residents, the rule is clear: only the Net real estate assets located in France Assets exceeding €1.3 million as of January 1st are subject to the French wealth tax (IFI). Unlike residents, non-residents are not taxed on their foreign real estate assets. This is a significant structural advantage.
Progressive IFI tax scale
| Portion of taxable net assets | applicable rate |
|---|---|
| Up to €800,000 | 0% |
| From €800,001 to €1,300,000 | 0.50% |
| From €1,300,001 to €2,570,000 | 0.70% |
| From €2,570,001 to €5,000,000 | 1% |
| From €5,000,001 to €10,000,000 | 1.25% |
| Over €10,000,000 | 1.50% |
Tax optimization levers for non-residents
Several strategies can be used to reduce the taxable base for the IFI (French wealth tax):
- Deduction of allowed debts : outstanding mortgage loans, planned renovations, property taxes due
- Structuring as a SCI (Société Civile Immobilière - French real estate company) Depending on the structure, SCI shares may benefit from a valuation discount
- Split of ownership (bare ownership / usufruct) Bare ownership is not subject to the IFI (French wealth tax) for the bare owner.
- Asset allocation : prioritize financial investments (assurance-vie, foreign SCPIs) rather than direct real estate in France
«"The IFI declaration is made using form 2042-IFI, attached to the annual income tax return. Any omission may result in significant penalties."»
Two particular cases deserve attention. First, the mixed couples If one spouse is a French tax resident and the other a non-resident, the tax household rules apply differently depending on their marital status. Then, the return to France If you return to live in France after at least five calendar years spent outside of France, only your real estate assets located in France remain subject to the French wealth tax (IFI) until December 31st of the fifth year following your return (Article 964 of the French General Tax Code). Your worldwide real estate assets are then included in the tax base. Finally,’exit tax may interact with the IFI at the initial departure, particularly if you hold shares in predominantly real estate companies.
Capital gains on real estate and social aspects: pay attention to the conditions
Mastering the management or transfer of one's assets also involves a good understanding of capital gains tax and associated social security contributions.
Applicable rates and exemptions
When a non-resident sells a property located in France, the Capital gains on real estate are taxed at 19% as income tax. Social security contributions are added at a rate of 17.2%. If you are affiliated to a social security scheme in a country of the European Economic Area (EEA), Switzerland or the United Kingdom, you are not exempt: you pay instead a solidarity levy of 7.5%.
| Seller's situation | Income tax on capital gains | Social charges |
|---|---|---|
| Other non-residents | 19% | 17.2% |
| Affiliated with the EEA, Swiss or UK social security system | 19% | 7.5 % (solidarity levy) |
| Transfer of ownership of primary residence in France (subject to conditions) | Exempt | Exempt |
THE Social security contributions are not systematic. For non-residents: their application depends on your affiliation with a social security scheme. For someone affiliated with the social security system of an EEA country, Switzerland or the United Kingdom, the rate drops from 17.2 % to 7.5 %, a reduction of 9.7 points on the net capital gain.
Mandatory steps during the transfer
- Appoint an accredited tax representative in France if you reside outside the European Union, Iceland and Norway, and if the sale price exceeds €150,000.
- Calculate the net capital gain by applying the allowances for length of ownership.
- Prepare the real estate capital gains tax return For a property sale, it generally falls under form 2048-IMM-SD, prepared and filed by the notary according to the applicable regulations for the transaction. Check the form and any applicable exemptions with them.
- Pay the tax owed directly during the transfer, via the notary who acts as collector.
- Check eligibility for exemptions depending on the applicable tax treaty and your social status.
Pro tip: The allowances for holding period are the same for non-residents and residents. After 22 years of ownership, the capital gain is entirely exempt from income tax. After 30 years, it is also exempt from social security contributions. If you are considering selling, compare the tax residency criteria applicable to your situation to determine whether a temporary return to France could modify your tax treatment, without triggering a reclassification of residence.
Our expert perspective: demystification and practical advice
In our daily practice at Balmont Conseil, we regularly observe three recurring errors among non-residents who manage their French taxation on their own.
The first, and undoubtedly the most costly, mistake is ignoring the applicable tax treaty. Many of our clients only discover later that they could have benefited from a tax credit in their country of residence for taxes paid in France, or conversely, that certain income should have been declared differently. A lack of awareness of tax treaties not only generates additional costs, but also exposes clients to tax reassessments.
The second mistake concerns the average tax rate option. Many people are unaware of its existence, or fail to request it because they haven't calculated their global tax rate. Yet, it's often the simplest way to significantly reduce the tax owed in France.
The third mistake concerns wealth structuring. Directly owning real estate in France when a SCI (Société Civile Immobilière) or a split ownership arrangement could have reduced the IFI (Impôt sur la Fortune Immobilière) tax base or facilitated inheritance is a default choice we see far too often. These structures are not reserved for the very wealthy; they can be applied even with modest real estate assets.
As Alexis Sagnier points out: «International taxation is not a fixed constraint. It is a regulated playing field, where each personal situation contains optimization opportunities that only a cross-reading of French and foreign rules can identify.» Consult our non-resident case study to see how these principles apply in practice.
Benefit from tailored support to optimize your tax situation.
Do you want to go further or adapt these tips to your situation? Here's how to get expert guidance.
Mastering French taxation as a non-resident requires a comprehensive understanding of French regulations, international conventions, and your personal circumstances. At Balmont Conseil, we assist expatriates, executives, and high-net-worth families each year with...’income tax optimisation and international wealth structuring. It is also essential to explore the tax strategies in Switzerland, which can offer attractive opportunities for non-residents. Through careful planning, it is possible to benefit from a favorable tax framework while protecting and optimizing one's assets. A personalized approach allows solutions to be tailored to the specific needs of each individual or family. It is also crucial to be informed about the Tax advantages in Spain for expatriates, which may represent an attractive alternative for those wishing to settle outside France. By analysing the different options, it is possible to maximise your gains and reduce your tax burden. Finally, it is advisable to stay alert to legislative changes in order to take advantage of the opportunities available.
Whether you are concerned by IFI (real estate wealth tax), an imminent property sale or simply the compliance of your tax returns, we analyse your situation with precision. Discover our overall approach in our wealth management guide Schedule an initial confidential consultation. Every situation is unique: your tax strategy should be too.
To learn more: Taxation of rental income in Germany: an expat guide.
What remains due in France when living abroad: the checklist
- Income tax on French source income (rents, pensions, salaries), according to the conventions, with a minimum rate of 20 % or 30 % and the possibility of applying the average rate if it is more favorable (impots.gouv.fr, «Taxes to be paid in France», updated on 26/02/2026).
- Real estate wealth tax on real estate assets located in France alone, exceeding €1.3 million (same page; see the IFI for non-residents).
- Local taxes : property tax and housing tax on secondary residences, paid at the tax center of the location of the property (same page).
- Social charges For non-residents, CSG and CRDS only apply to income and capital gains from French real estate. Individuals affiliated with a social security scheme in the European Economic Area or Switzerland have been exempt since 2019; the 7.5% solidarity levy remains due (see the solidarity levy).
- Withholding tax on French salaries and pensions : BOFiP scale BOI-BAREME-000043 of 02/04/2026 (0 % up to €17,275, 12 % up to €50,112, 20 % above that, after a deduction of 10 %). See withholding tax.
- Capital gains on securities : see when France taxes capital gains on securities held by non-residents.
- Assurance-vie and pensions : see What to do with your French assurance-vie policy when leaving and pension comparison by country.
To justify your residence abroad: what evidence to keep ; for a return: I am returning to France after living abroad.. Source : Information sheet from the administration, specifics of taxation for non-residents (March 2026).
Frequently asked questions about non-resident taxation
What income must be declared in France when one is a non-resident?
A non-resident must declare only their French-source income, such as rental income, salaries earned in France, capital gains on real estate, and pensions from French pension funds. Foreign-source income is not subject to French taxation.
Can I be taxed twice on the same income as a non-resident?
Most tax treaties signed by France avoid double taxation: check the agreements between France and your country of residence to find out the mechanism applicable to each type of income.
What is the minimum tax rate for non-residents?
For French-source income received in 2025 and taxable in France, declared in 2026, the minimum rate is 20% of the % taxable income up to €29,579, and 30% of the % taxable income above that amount, excluding specific rates for French overseas departments and regions (DOM). You can request the average rate calculated on your worldwide income if it is more advantageous. Tax treaties and specific circumstances must be taken into account.
Do I have to pay the IFI if I don't live in France?
Only net real estate assets located in France are subject to the IFI (French wealth tax) if their value exceeds €1.3 million on January 1st. Your foreign real estate assets are not included in the taxable base.
Which form should I use to declare a capital gain on real estate as a non-resident?
For the sale of a property located in France, the form is generally 2048-IMM-SD; the notary handles the formalities applicable to the transfer. Form 2074-NR should not be used as the general form for real estate sales. The transfer of shares in real estate companies is subject to separate analysis and formalities.
Recommendation
- Taxation of non-residents in France
- Non-resident tax return: a complete guide for 2026
- Taxation of non-residents
- Taxation of non-habitual residents in Portugal in 2026
To learn more: Retirement savings plan for non-residents: optimize your savings and taxation ; Furnished rental property (LMNP) for non-residents: avoid tax pitfalls.
