French tax law is considered complex
French tax law is very complex, so it is crucial that you learn about it thoroughly or get the right advice.
In France, there are three types of taxes you need to know about:
VAT is a value added tax, which is valid throughout the European Union in accordance with Directive 2006-112-EC, and is paid by the consumer and added to the price of taxable goods. The amount of tax on the sale of goods and services in France is 19.6%, and from 1 October 2012 it increased to 21.2%. The reduced tax rate applies to food and certain agricultural products (5.5%), books, public transport, newspapers and magazines (7%).
French corporation income tax (CIT) does not apply to the income of their permanent establishments in foreign countries, but to the income they generate on French territory. The subject of corporate income tax coverage are dividends of parent companies and capital gains. From January 2010, the CIT tax rate starts at 28%, and those companies with several million are subject to a tax rate higher than 31%.
PIT is personal income tax or income tax. France is subject to a progressive tax rate, which means that it goes from 0% to 45%, with an additional 3% taxation for the part of the income that exceeds € 250,000 for a single person or € 500,000 for a married couple. If the income of a single person exceeds € 500,000 or the income of a married couple € 1 million, then an additional 4% taxation applies.
There are also a number of tax breaks available for all businesses, but only if they work with local charities, invest in renewable energy and sustainable production methods, or in technology and research.