French taxes and fiscal residency
There is no such thing as living in France “on the British system”. Most people who move to France will fall squarely under French taxation law.
In the UK, most income is taxed at source, while in France it is declared once a year and then taxed.
Being fiscally resident in France means you must fill in an income declaration form in May each year, detailing your income from the previous year.
France’s income tax levels are fairly low. When people refer to France as being a country of high taxes they usual mean social charges (the equivalent of national insurance contributions).
Useful tip
- The French taxman does not come and find you in your first year. The onus is on you to go to your local tax office (hôtel des impôts) to get the income tax forms.
In the full Moving to France helpguide, we explain:
- Switching your fiscal residence to France
- French income tax bands and deadlines
- Filling out and filing your income tax form
- How your bill is calculated depending on size of household
- How government pensions are taxed
- Tax on bank account interest
- How double taxation is avoided
- Social charges (national insurance contributions)
- Exemptions for certain old-age pensions
- Local taxes on property owners and tenants
- The French television licence
- Wealth tax and who has to pay
- The bouclier fiscal tax cap
- Planned tax reforms in 2012
Download the guide as a PDF now from this link
…or ask a question about this topic in the comment box below.
Hello,
I have something of an odd situation which I hope you may be able to advise about.
I lived and worked in France from October 2008 – October 2010. During that time I filed my annual tax return and paid all taxes owed. In October 2010 I returned to the UK. In 2011 I received letters from the French tax office for advance tax payments for the 2010 financial year as well as the annual tax return. These letters were sent directly to my UK address and on the tax return I stated that my residence on 1st Jan 2011 was in the UK. In October 2011 I fully paid the remaining tax which I owed for working in France in 2010.
It is now February 2012 and I have just received an advance tax payment request for 2011. Why am I receiving this as I have not lived or worked in France for 18 months and they are sending this paperwork to my address abroad? How do I notify the French tax office that I am not resident or liable for French income tax anymore?
Many thanks.
[Reply]
I am a french tax resident and an American citizen. I have recently inherited money from my parents in the U.S.. Will I be subject to French inheritance tax if I leave it in the U.S. ? Can I not simply declare the income generated by these funds ?
Thank you for your reply.
[Reply]
At the moment I live in Germany, I am moving to France with my wife in April, how do I get health cover through the CPAM??
[Reply]
My partner and i are currently living in Australia and have been for many years. We were both born in the UK and therefore UK Citizens. We are looking to move to France in 2013 permanantly. From previous postings I have read am I right that my partners pension from FESA – Fire & Emergency Services Australia would be exempt from French tax? This would be our only source of income at least until age 65 when we would qualify for a partial UK pension. From my understanding we would still declare the income from the Fire Service pension just to assess our eligible tax rate but are we actually taxed on this pension? If you can please advise that would be appreciated.
Kindest regards,
Fiona Seymour
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:06 pm
Blevins Franks respond:
“Under the terms of the France/Australia double taxation treaty, government service pensions paid out of Australia to a French tax resident remain subject to Australian tax only. Fire & Emergency Services pension is likely to qualify as a government service pension; however, you should confirm this with the Australian tax authorities.
You will still have to report the income on your French tax return. The income is taken into account for the computation of the French tax liability and a credit will be given for the French tax and social charges that would have been due on the income if it was actually taxable in France. In effect, if you have no other taxable income there will be no liability to French income tax or social charges. “
[Reply]
Hello,
My partner and I moved to France in December 2010, our sole income is my private pension which is taxed accordingly in the UK. I am not of retirement age but do not envisage working in France, my partner is much younger and we are wondering if we became PACSd, were taxed in France instead, whether the tax payable on my pension would be less than that in the UK? Also would that pension be charged the Social Charge?
My partner is starting a business under the auto-entrepreneur system, if we were PACSd would his income and my pension become joint income and hence taxed, social charge as a single unit?
I would appreciate your advice, many thanks,
Kindest regards
Caroline Beecroft
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:06 pm
Blevins Franks respond:
“It is likely that you are already French tax resident and subject to French income tax and social charges on the basis that you moved to France in December 2010. You cannot choose where you pay your tax, and therefore it is important that you declare your income in France if you live there permanently.
Under the terms of the UK/France double tax treaty, the income from your private pension is subject to tax only in France and not in the UK. Pension income is also subject to social charges at a fixed rate of 7.1%. However, UK source pension income is exempt from social charges if you qualify for Form S1 which is issued by the Department for Work & Pensions. You are entitled to the form if you have a recent UK National Insurance Contribution record or if you are in receipt of your UK State pension.
In order to get your UK source private pension paid gross to you, you should submit Form FRA/Individual (available on http://www.hmrc.gov.uk) to the French tax authorities with your first French tax return that includes that income. The French authorities will then stamp the form and forward it to the UK Revenue who will then refund any UK PAYE that has been withheld during the period of French residence.
As PACS partners, you would be taxed on a household basis, effectively getting the benefit of the lower rate bands twice. Your pension income and your partner’s income under the auto-entrepreneur scheme would be added together, and the marginal tax rate would depend on the total income. It is impossible to say whether the French tax liability would be less than the UK liability on the same income without knowing your full circumstances; you should seek specific advice based on your actual income level.
Note: The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.”
[Reply]
Hello,
I moved to France, near Aix-en-Provence, 3 months ago together with my wife and our two kids.
Before, we were leaving in Athens, Greece, where both my wife and I were working and were therefore taxed there for our personal incomes. Since January 2011 we are practically both unemployed, regardless I am still a shareholder in a real estate company in Greece, but it does not make any profit yet. So, our only income at the moment comes from a property rental in Greece, and we live with our savings. In addition to that, I am a shareholder in a company that is based in Cyprus, which was established in Oct 2010 and if it makes any profit will pay me my dividends by the end of the year. As well, by the end of this year I will start working for a company in Monaco.
So…. to sum-up:
Based in France (family), work in Monaco (employee), company in Cyprus (shareholder), Company in Greece (shareholder), Property income in Greece (house rental).
My questions:
Where shall i pay taxes and can I really choose??
Can I become resident in France even if I will work in Monaco and when (before my employment agreement starts)? If yes, what is needed?
Please advice.
Thanks in advance,
Yannis
[Reply]
My wife and I moved to France 10 years ago when we retired. We have had fiscal residence throughout and our pensions have been taxed accordingly; some income taxed in the UK, some in France.
Throughout the 10 years we have returned to the UK only for short stays.
We have recently purchased a mobile home in the UK and intend to use it for 4 months each year. Will this affect how are income is taxed.
Our current income is taxed as follows:
Teachers Pensions – Taxed in UK
Private Pension – Taxed in France
State Pension – Taxed in France
Interest from Bonds – Taxed in France
[Reply]
Hello,
Please could you advise me?
My husband & I have been tax resident in France for 8 years. All our money is invested in Assurance Vie and this generates our only income.
I am now living in the UK (to help with grandchildren) while my husband remains in France. Aught I to change my residency status to the UK & is this possible while still married? It is vital that my husband remains covered by the French healthcare system. Would it be possible to move the Assuramce Vie into sterling equivilents and how much would this cost?I am anxious about the future of the euro (who isn’t?!)
I would greatly appreciate your advice or who I could contact for such advice.
Yours sincerely,
Caroline Jackson
[Reply]
I have been resident in France since 2007 and been within the French tax system from the start (having completed the relevant E form). I, and my wife, have been in receipt of UK state pensions during this time. I also have ‘government pensions’ from my time as a civil servant and in a university (both taxed in UK and not France). In addition I have two pensions from work with private sector organisations which are taxed in France.
I have just received, for the first time, a tax bill demanding 0.5% payment for CRDS based on the income from all my pensions.
My understanding was that such social charges were not due on any pension income from those in recept of a state pension, and certainly not on the state pension as it is paid as a result of social charges made on income whilst in employment.
I have been told that the local tax office made an error in not charging me in previous years.
Your advice on any way that I can reduce this bill would be welcome.
Colin Rigg
[Reply]
By the time I reach 65 I will have been paying all the minimum basic social security contributions for 15 years in France(I am the ‘gérante’ of our “SARL” (winemaking)which employs my husband and myself only)- …. I am trying to find out what amount of state pension I would be eligible for from 65 onwards….. I have no complementary pension, only modest assurance vie, and we are not eligible for any other state pensions whatsoever.
[Reply]
My wife and I moved to France in March 2011. We still have two houses in the UK – our main residence since 1986, and a holiday cottage we have owned since 1996. We intend to sell both of these, to use some of the proceeds to buy a flat in the UK and invest the rest in an assurance vie.
I had been assured, before we moved, that there would be no capital gains tax to pay on the house that had been our main residence for the last 25 years (until March this year), even though our main home is now in France. Is this correct? The house is currently let until June 2012, by which time we hope to have sold it.
[Reply]
Hello
I am Australian living in France and technically inactif work-wise for the time being. I live from my savings and do not have enough income to pay tax in Australia ( and probably ditto in France given the exchange rate ).
It’s not clear what my tax obligations here are as a non-income-producing tenant. I make quarterly contributions for health insurance.
Thank you
[Reply]
MikeW Reply:
October 6th, 2011 at 8:34 am
I meant to add, I have a house in Australia which I rent out, although most of the income goes towards servicing mortgage interest and household maintenance. The remaining funds do not push me over nil tax threshold.
[Reply]
What is the official exchange rate figure, for tax purposes, for 2010 between the pound / euro. I have heard various figures.
[Reply]
Moving to France editor Reply:
August 23rd, 2011 at 9:18 am
For income tax declarations, there is no official exchange rate published by the French government. In theory, the law says every exchange should be calculated at the exact moment it was done. However, these laws were conceived with the occasional transfer carried out by the average French person, not the regular international income of a British expat. The following figure is the average daily interbank exchange rate for 2010, which is acceptable to most tax offices: £1 = €1.1654.
[Reply]
Dear Sir,
My wife and I are in receipt of State Pensions, which we have opted to have taxed in France. We also have Police & Teacher’s Pensions which as you are aware must be taxed in the UK. We have visited the local Tax office to discuss our return for this year, which is affected by the new Tax Credits system. Based on our figures i.e. our State, Police and Teacher’s pensions, which show a relatively small increase over last year we have been advised, after applying the Tax Credits, that our Tax in French will increase by more than 100%. This increase seems totally out of proportion. Do you expect the Tax Credit system will have the same effect of everyone i.e. increasng their French tax? I would welcome your comments.
Thank you in advance,
Patrick Elliott
[Reply]
Moving to France editor Reply:
August 23rd, 2011 at 9:37 am
Blevins Franks respond:
It is correct that your state pensions are taxable in France and not the UK. The government services pensions remain taxable in the UK, and whilst not directly taxed in France, are taken into account to determined the tax rates payable on your other French taxable income (i.e. your state pensions).
You should not be liable to social charges in France on your pension income provided you hold Form S1.
You are taxed as a household in France, and as a married couple are entitled to two parts. This means that your total income is effectively shared between you and allows you to utilise fully the lower tax bands.
France does not have a personal allowance, but the first €5,963 is taxed at 0%. As a married couple, this means that you are not taxed on the first €11,926 of combined income.
Various tax credits are available in France which reduce your tax bill. These include, for example, the purchase of an environmentally friendly car, energy-saving work carried out of the main home, charitable contributions, employment of home help etc. There is a tax credit available for five years for mortgage interest on the purchase of a main home if this was purchased before 2011.
From 2010 (i.e. tax payable in 2011) the maximum total reduction that can be received is €20,000 plus 8% of the global net taxable income of the household (before the scale rates are applied).
In addition, if the tax due is less than Є878 for 2010 income, you will receive a credit from the tax office, known as the Décote.
The Décote is half the difference between €878 and the tax due. This amount is then deducted from your tax bill. So, if the tax due were €720, the Décote would be €79 (i.e. ½ x €158). Your new tax liability would now be €641.
If your eventual liability, after calculating the Décote, is less than €61, the tax is not collected – this is the Franchise.
Therefore, the level of tax you are liable for in France will depend on your level of income, and the tax credits available to you will depend on your own personal position. However, as your income increases, your tax bill will also increase. It is also likely that the tax credits available may reduce in future as the French government are looking at ways to increase revenue.
Statements relating to taxation are based upon current taxation laws and practices which may be subject to change.
[Reply]
M Honour Reply:
October 24th, 2011 at 5:49 pm
Dear Blevins Franks, re your reply 23/08/2011. I am in receipt of a UK government pension as well as the “old age” pension. I expected these to be taxed (2010) as your reply. However the local “tax offfice” has taxed both pension as france imposable and then deducted tax paid in the UK. Can you confirm this is incorrect and outline the appeals process if so. Thank you
[Reply]
I have lived in France my main and only residence for seven years, where I have lived on my state pension;and still been technically a non resident as I did not apply to go into the French tax system; In ignorance on selling my house recently I discover I am liable for full 30 percent capital gains tax on the profit, which has been deducted already by my notaires; However I have heard that as my pension is the basic uk government pension and I have no other asset or income I may be able to be able to have this tax returned; It seems to be a very vague grey area, and on signing the notaire suggested we postpone it that day in order for me to rush to the UK to rent a property and prove I have a second residence which would have reduced the tax to the 19 per cent;I am sure many retired British people who live here permanently and do not feel they need to change from declaring their tax in France if like me it is so minimal may experience this confusion ; I would appreciate your comments many thanks Roger
[Reply]
Moving to France editor Reply:
July 18th, 2011 at 9:26 am
Blevins Franks respond:
Residents of France are liable to French tax on their worldwide income, and, even if it may fall into the Nil Rate Band (the first French tax rate is nil – it is not a tax-free personal allowance), must declare the income in France. EU residents only pay 19% tax on capital gains in France (non-residents don’t pay social charges). French residents pay combined tax and social charges of 31.3% on properties that are not their main home, and non-EU residents pay 33.3% tax on their gains. There is also a form of taper relief available at 10% of the gain for each complete year of ownership in excess of 5 years.
The trouble is that you have not been compliant for tax in France, in that you haven’t been submitting a tax return, and therefore, you have no proof that you are actually French resident; had you done this, the gain arising on disposal of the property would have been nil, as the main home is exempt from tax in France if sold whilst you are living in it. However, even preparing and submitting tax returns for all of the years that you have been in France now will probably not avoid this tax now, as the property has been sold before this has been done. Had you brought your position up-to-date prior to selling the property, no tax would have been due.
Technically, what your Notaire is proposing could be viewed as tax evasion (which can be a criminal offence in France), because he is suggesting that you defer the sale until you can prove that you are resident in the UK, when the sale is already complete (and if they have received the monies for the sale, it must be nearly complete), reducing the tax bill.
There is an exemption in France from capital gains tax on the disposal of real estate for holders of a state retirement pension (as opposed to a government service pension, such as a civil service, local authority, armed forces, police, teacher’s or fire service pension), provided that two years before the sale there was no liability to wealth tax, and your income is below a certain level, currently around €10,000. Your Notaire should be able to review this position, and advise you more fully. If he is unaware of this, you should approach another Notaire or an Anglo-French lawyer regarding this. If another Notaire is appointed, they should share the fee, as the fee is set by the Government in France.
To all other people in France who are not declaring their income to the French authorities, you run the risk of having to pay tax on any gain arising on disposal of your main home in France, and you may be paying too much tax on your income by not declaring it in France. In addition, there can be more tax-efficient investments available to you than by retaining UK ISA, PEPs and premium bonds. Finally, with UK assets and Sterling income, if the exchange rate moves against you, you can lose out on both your wealth and your income levels can drop significantly. It pays to take advice, even if you have already moved to France, and you should take advice from a firm that understands how the taxes work in both countries, such as Blevins Franks, so that you can minimize your taxes and maximise your income.
[Reply]
Dear Sir,
We moved to France in October 2005 and bought a property in 2006. We have been paying income tax on my husbands pension for the time we have been here! Today we received Tax forms dating back to 2008!!
What are the implications of this, I would be grateful for a reply.
With best regards
Celia
[Reply]
Moving to France editor Reply:
June 10th, 2011 at 4:26 pm
Reply from Blevins Franks:
“It is not clear from your question where you have been paying tax on your husband’s pension income, nor what source it comes from and where that is.
French tax residents are subject to French taxation on their worldwide income, subject to any relevant double tax treaties. UK source pension income, with the exception of Government Service Pensions (Fire, Police, Armed Forces, Civil Service and Local Authority pensions) are directly taxable in France. However, until they are satisfied that you are resident in France, and paying tax there on such income, HM Revenue & Customs (HMRC) will continue to deduct UK tax at source. You should arrange for gross payment of these in the UK, using Form FRA/Individual (also known as FD5), which is available from HMRC. This form should be completed and submitted to the French tax authorities. They will then notify HMRC that you are resident in France and paying tax there on that income. HMRC will then notify your pension provider not to deduct tax at source, and will repay any UK tax incorrectly deducted at source since you became French tax resident.
Even if you are in receipt of a UK Government Service pension, whilst this is not directly taxed in France (it remains taxable in the UK, and you are still entitled to your UK personal allowance to set against this), it should be reported on your French tax return. This is because this income is taken into account to calculate the effective rate of French tax on your other income which is directly taxable in France (e.g. other pension income, investment income). So the French take government service pensions into account when making their tax calculation, then give you a credit for the French tax that would have been payable on the income (if it had actually been taxable in France). The total effect of this is to increase the effective tax paid on income which is directly taxable in France, and this is known as the taux effectif in France.
You should remember that if you don’t hold Form S1 (available for a maximum period of 2½ years to those with a recent UK National Insurance Contributions record from employment or self-employment, or to those in receipt of their UK state retirement pension), social charges of 7.1% are due on 95% of your pension income. Those in receipt of a Government Service Pension should receive a credit for the social charges payable on their pension income if they don’t hold S1, as this is not directly taxable in France.
Therefore, if you have been paying UK tax on your husband’s pension income when you should have been paying tax in France (or at least declaring the income in France), you need to rectify the situation as soon as possible to minimise any penalties and interest.
The above is based upon current taxation laws and practices which may be subject to change.”
[Reply]
Hello,
I have been living in Frace for over seven years. Last August
I sold a flat in London which I had for almost 12 years. I understand that people living abroad for over 5 years are exempt from payment of CGT in UK. I suppose I have to declare it in my Franch tax return form. I have read on Angloinfo Tax information pages that people receiving state pension or are invalids are exempt from paying CGT in France. I would very much appreciate your confirmation and advice in this regard as I do receive UK based state pension.
Thanking you in advance, Mahin
[Reply]
Moving to France editor Reply:
February 15th, 2011 at 12:34 pm
Blevins Franks respond:
Dear Mahin,
You are right that the gain will be exempt from UK capital gains tax. Non-residents are not liable to UK capital gains tax, even on the sale of UK assets, provided they are non-UK resident for at least five complete UK tax years.
From the French point of view, capital gains tax is payable on worldwide assets if you are resident in France at the date of disposal. There are reliefs in relation to real estate gains. Where the property has been owned for more than five complete years, the gain is reduced by 10% for each subsequent year of ownership. As your property has been owned for 12 years, the gain would be reduced by 70%. The remaining 30% would be chargeable to French capital gains tax and social charges, at a total rate of 31.1%.
You can be exempt from capital gains tax on the sale of immoveable property in France if you are in receipt of a state pension AND:
• you did not have a liability to wealth tax in the tax year preceding the year before sale (i.e. two years before the year of sale); AND
• Your taxable income in the tax year preceding the year before sale (i.e. two years before the year of sale) was below a certain level. For 2011 gains your income during 2009 must not have exceeded €10,024 for the first part in the household and €2,676 for each additional half part. So, for a married couple, the income limit would be €15,376.
[Reply]
Blevins Franks responds:
Dear Mr Fowler,
UK Civil Service pensions, as with other ‘Government Service’ pensions, such as local authority, police, state teacher’s, armed forces and fire brigade pensions are all taxable solely in the UK under the terms of the UK/France double tax treaty (although this is not the case under all tax treaties). You are entitled to your UK personal allowance in the UK, and the balance (if any) is taxed at the UK scale rates (20 per cent, 40 per cent and 50 per cent from 6th April 2011).
However, whilst the income is not directly taxed in France, it should be reported on the French tax return. This is because this income is taken into account in France to calculate the taux effectif, the effective rate of tax due on other income that is directly in France. So what happens is that the tax liability is calculated on all income, including this income, and then a credit is given for the French tax that would be due on the income, not any UK tax paid.
State retirement/old age pensions are not ‘Government Service’ pensions, and, like personal or other occupational pensions, are usually taxable solely in the country of residence (although this does depend on any relevant tax treaty). Therefore, this income will be added to your other income and will be taxable in France at the scale rates of tax (currently ranging from 0 per cent to 41 per cent). You will be entitled to a deduction of 10 per cent of the income (limited to a maximum of €3,660 per household at present), and may also be entitled to age-related deductions, depending on your total income.
Such income is paid gross in the UK, but other pensions do have tax deducted at source, and you need to take action to stop this happening.
[Reply]
Michael Staunton Reply:
October 21st, 2011 at 1:44 pm
You state, “UK Civil Service pensions, as with other ‘Government Service’ pensions, such as local authority, police, state teacher’s, armed forces and fire brigade pensions are all taxable solely in the UK under the terms of the UK/France double tax treaties.”
Not strictly true. The UK-France Double Taxation Convention of 19 June 2008 in its article 19 – Government Service – states in its sub-paragraph 2, “However, such pension shall be taxable only in the other Contracting State (ie France) if the individual is a resident and a national of that State without also being a national of the first mentioned State (ie UK)”.
I have the personal proof of the application of this sub-paragraph. Iam a dual French and Irish citizen and am not a UK citizen resident in France in receipt of a UK Civil Service pension. HMRC have agreed that my civil service pension is not taxable in the UK. it is paid gross and declared to the French tax adminstration, resulting in a considerable saving when compared to UK tax rates.
[Reply]
Blevins Franks responds:
Dear Jacqueline,
In France, any gain will be taxed in the hands of the disposing party, unless they gift it to the other party (in which case, gift tax may be due), or the disposal forms part of a divorce or separation agreement.
Otherwise, the difference in the value of the seller’s share at the date of disposal and the date of acquisition is subject to French tax (regardless of your residence position) at a flat rate of 19 per cent from 1st January 2011, even where the asset is passing between spouses (unlike in the UK).
Where improvements have been made to the property by artisans, documented expenditure is also tax-deductible, although, once you have owned the property for at least five years, 15 per cent of the original purchase price is deductible in lieu of improvement expenditure, even where the property has not been improved!
Finally, incidental costs of acquisition and disposal are also deductible. There are reliefs available depending on how long you have owned the property (10 per cent of the calculated gain for each year of ownership in excess of five years) and if you have previously lived in France, or if the property has been your main home.
French residents also pay social charges on the gain, as calculated above, at a flat rate of 12.3 per cent.
Other French taxes due are the 5.09 per cent registration tax, payable by the acquiring party, depending on the value of the property, and, of course, notaire’s fees will also be due. If the property is being sold within five years of acquiring it off-plan, VAT will also be due on the sale.
If you are not French resident, capital gains tax may be due in the disposing party’s country of residence. This would not be the case between UK resident spouses, but would be for any other UK residents eg. a parent to a child, and would be calculated according to the rules of that country. Whether any relief would be available is a matter of whether that country has a tax treaty with France, or offers unilateral relief where the same gain is taxed in both countries.
[Reply]
Hello,
What taxes are charged on a property that is jointly owned when one of the co-owners wishes to sell to the other party?
[Reply]
I am resident in France (arrived 2005) and have severed all connections with the UK. For the last 3 years I have received a Civil Service which is taxed by the UK under a double taxation convention. The french do not seek to deduct tax. In two years time I will commence to receive a UK state retirement pension (old age pension). How will this be treated for taxation purposes? Many thanks.
David Fowler.
[Reply]
I am a British citizen resident only in France.Most of my income consists of 2 different German state pensions.These were already taxed in Germany before I left for the whole of the year in which I moved (2009).Now the local French tax authority insists on taxing all my foreign pensions whether state or private,quoting a certain paragraph in the French-German double taxation agreement.Experts tell me a different paragraph applies to my case.I have already complained to the local Mediator,but have had no reply.Surely in principle a mistake has been made here,since the purpose of the agreement is to avoid double taxation.Can you offer any advice, other than taking the matter if necessary to the Regional Administrative Tribunal?
[Reply]
Moving to France editor Reply:
February 15th, 2011 at 12:40 pm
Blevins Franks responds:
Dear Mr Puttick,
Under the France/Germany tax treaty, state pensions are taxable only in the source country, i.e. Germany in your case. The income still needs to be reported on your French tax return though.
In France, your German state pension is not directly taxable, but it is taken into account to determine the amount of tax payable on your other income that is directly taxable in France. So, whilst not directly taxed, it will increase the effective rate of tax payable on your other taxable income in France. This method is called the taux effectif in France.
You should check that your German state pension has only been taken into account for the taux effectif. If the income has been directly taxed in France, then this is incorrect, and we would recommend you contact a French accountant to handle the negotiations with your local tax office.
[Reply]
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