France Confirms Large Tax Cuts

On June 12, 2019, the French Prime Minister told the National Assembly that the government intends to cut taxes by 27 billion euros over the next five years. The initiative will include elimination of the housing tax. 

The plan, inspired by the widespread “yellow vest” protests across the country earlier this year, will include an income tax reduction of about one-third, or 350 euros on average, for about 12 million taxpayers, and another 5 million households will see smaller reductions of about 180 euros.  The details will be provided in the 2020 budget bill.

Also planned is complete elimination of the housing tax by 2023.  The housing tax applies to all occupied housing in France and is based on rental value.  The tax is paid by homeowners and renters alike and varies considerably between locations.  It has been reduced in previous budgets but is still a costly expense for individuals living in France.  Because the 2019 budget had proposed elimination by 2020, the delayed elimination in the new budget is disappointing.  The total revenue cost of elimination is expected to be about 20 billion euros.

How This Impacts Mobility

Companies with expat employees in France will benefit from reduced taxes on those employees, particularly the housing tax, which is payable whether expats own or rent housing.