US Expat Tax Guide: Americans Living in France (2025 Tax Year) 

US Expat Tax Guide: Americans Living in France (2025 Tax Year) 

Living in France as an American expat means dealing with two sophisticated tax systems, but here’s the reassuring news: France’s top income tax rate of 45% (plus additional surtaxes) means French taxes typically generate substantial foreign tax credits that often eliminate US tax liability entirely. Whether you’re captivated by Paris’s charm, Lyon’s cuisine, or France’s exceptional quality of life, mastering your tax obligations doesn’t have to be overwhelming. 

As a US citizen living in France, you’ll file taxes in both countries, but the Foreign Earned Income Exclusion and Foreign Tax Credit typically eliminate any US tax liability. For 2025 (filed in 2026), you can exclude up to $130,000 of foreign earned income from US taxation (using FEIE), and France’s higher tax rates often provide enough foreign tax credits to cover any remaining US obligations. 

The key is knowing how both systems work together to your advantage and ensuring proper compliance from the start. 

Tax Obligations as a US Expat in France 

French Tax Residency Rules 

France uses clear criteria to determine tax residency. You become a French tax resident if you meet any of these conditions: 

  • Primary residence in France (your main home is located in France) 
  • Spend 183+ days in France during a calendar year 
  • The center of economic activity is in France (the majority of professional activities or investments) 
  • France is your primary employment location (main professional activity derived from France) 

French tax residents pay taxes on worldwide income at progressive rates ranging from 0% to 45%, plus potential surtaxes that can push the effective rate to 55.4% for high earners.

Non-residents pay taxes only on French-source income, typically through withholding taxes at progressive rates of 0%, 12%, and 20%. 

US Tax Obligations Continue Abroad 

As a US citizen, you must file US tax returns regardless of where you live. This means: 

  • Annual US tax return filing by April 15 (automatic extension to June 15 for expats) 
  • Reporting worldwide income to the IRS 
  • FBAR filing requirements if foreign accounts exceed $10,000 at any point during the year 
  • Potential Form 8938 (FATCA) filing for higher account balances 

The good news? The tax treaty and US expat provisions work together to prevent double taxation. 

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Two Main Protections That Eliminate Most US Tax Liability 

Foreign Earned Income Exclusion (FEIE) 

The FEIE allows you to exclude up to $130,000 of foreign earned income (2025 tax year) from US taxation. This works particularly well for Americans in France since French tax rates are generally higher than US rates. 

Example calculation: 

  • Annual salary in France: €75,000 (approximately $82,000) 
  • FEIE exclusion: $82,000 (full amount excluded) 
  • US tax owed: $0 

To qualify, you must meet either: 

Foreign Tax Credit (FTC) 

The Foreign Tax Credit provides a dollar-for-dollar credit against US taxes for income taxes paid to France. Given France’s high tax rates (up to 55.4% for high earners), this credit often eliminates US tax liability entirely. 

Example for higher earners: 

  • Annual income: €120,000 ($130,000) 
  • French taxes paid: €35,000 ($38,000) 
  • US taxes before credit: $26,000 
  • Foreign Tax Credit applied: $26,000 
  • US tax owed: $0 
Pro Tip

Many expats benefit from strategically combining both the FEIE and FTC, using the exclusion for earned income and credits for investment income or amounts above the exclusion threshold.

French Tax System Overview for American Expats 

Progressive Tax Rates for Residents (2025) 

Income Range (EUR) Tax Rate 
€0 – €11,509 0% 
€11,510 – €29,207 11% 
€29,208 – €82,341 30% 
€82,342 – €177,106 41% 
Over €177,107 45% 

Additional surtaxes apply: 

  • 3% surtax on income exceeding €250,000 (single) or €500,000 (married) 
  • 4% surtax on income exceeding €500,000 (single) or €1,000,000 (married) 

These combined rates can reach 55.4% for the highest earners, making France one of the highest-tax countries globally. 

Special Regime for New French Residents 

France offers an attractive “inbound assignee regime” for certain new residents. Under this special tax regime, qualifying individuals can benefit from significant tax exemptions on salary supplements and foreign workdays. 

Qualification requirements: 

  • Haven’t been French tax residents in the previous 5 years 
  • Assigned to France by a foreign employer or directly recruited abroad 
  • Must fulfill specific residence conditions 

Benefits include: 

  • Exemption from salary supplements connected to the transfer 
  • 30% flat rate exemption on total remuneration (alternative option) 
  • Exemption for foreign workday compensation 
  • Available for up to 8 years from arrival 

Common Scenarios and Solutions 

Scenario 1: Corporate Expat in Paris 

Situation: American working for a multinational company, €85,000 salary, housing allowance, company car 

Tax Strategy: 

  • Use FEIE to exclude most earned income 
  • French taxes on full income create substantial foreign tax credits 
  • Any US liability is eliminated through the FTC 
  • Focus on proper reporting of employer benefits 

Scenario 2: Entrepreneur in Lyon 

Situation: Self-employed consultant, $140,000 income, clients in multiple countries 

Tax Strategy: 

  • Use FEIE for income up to $130,000 (2025 tax year limit) 
  • Pay French income tax and social charges on the full amount 
  • Use the FTC for the remaining $10,000 of US taxable income 
  • Consider French business structure optimization 

Scenario 3: Retiree in Provence 

Situation: Retired American, US Social Security, 401(k) distributions, French rental property 

Tax Strategy: 

  • Social Security may be exempt under tax treaty provisions 
  • 401(k) distributions taxed in both countries, use the FTC 
  • French rental income taxed in France, credited against US 
  • Careful treaty analysis for optimal outcomes 

Filing Requirements and Deadlines 

French Tax Filing 

  • Tax year: January 1 – December 31 
  • Filing period: April – May for online filing (varies by department) 
  • Paper filing deadline: May 18 
  • Non-resident deadline: June 7 
  • Payment options: Single payment or installments 

US Tax Filing 

  • Primary deadline: June 15 (automatic extension for expats) 
  • Final extension: October 15 (with Form 4868
  • FBAR deadline: April 15 (extended to October 15) 
  • Payment due: Still April 15 (even with filing extension) 
Important

While you get extra time to file, any taxes owed are still due by April 15 to avoid interest charges.

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Avoiding Common Mistakes 

Mistake 1: Not Recognizing French Tax Residency Rules 

Many Americans accidentally become French tax residents without realizing the implications. France’s 183-day rule and economic center tests are broadly applied. 

Mistake 2: Missing FBAR Requirements 

French bank accounts, life insurance policies (assurance vie), and investment accounts may trigger US reporting requirements. The Report of Foreign Bank and Financial Accounts (FBAR) penalties for non-compliance are severe. 

Mistake 3: Improper Treaty Position Elections 

The US-France tax treaty provides benefits, but claiming treaty positions incorrectly can cost thousands and may require disclosure on Form 8833. 

Mistake 4: Overlooking French Social Charges 

French social contributions (CSG/CRDS) at rates up to 17.2% apply to various types of income and aren’t always creditable against US taxes. 

Tax Treaty Benefits and Social Security 

US-France Tax Treaty 

The comprehensive tax treaty between the US and France provides several key benefits: 

  • Eliminates double taxation on most types of income 
  • Provides clarity on which country has taxing rights 
  • Offers reduced withholding rates on dividends, interest, and royalties 
  • Includes tie-breaker rules for dual residency situations 
  • Special provisions for pensions, government service, and students 

Totalization Agreement 

The US-France totalization agreement helps prevent double social security taxation: 

  • For US company employees: Pay into the US system for assignments under 5 years 
  • For assignments over 5 years: Generally, pay into the French system 
  • For French company employees: Pay into the French system 
  • Benefits coordination: Credits earned in both countries count toward benefit eligibility 

Next Steps for American Expats in France 

If you’re planning your move to France: 

  • Learn French tax residency implications before establishing ties 
  • Consider the timing of significant financial transactions around your move 
  • Research French investment vehicles and their US tax treatment 
  • Set up proper record-keeping systems from day one 

If you’re already living in France: 

  • Determine your French tax residency status and obligations 
  • Evaluate whether FEIE or FTC provides better tax benefits 
  • Ensure compliance with all US and French reporting requirements 
  • Review your filing strategy annually as circumstances change 

If you’re behind on filings:  

  • Don’t panic—streamlined procedures can help you catch up with minimal penalties  
  • Gather necessary documentation systematically  
  • Consider voluntary disclosure programs for optimal outcomes 

Living as an American expat in France offers incredible personal and cultural enrichment opportunities. With proper tax planning and compliance, you can focus on enjoying France’s rich culture, excellent healthcare system, and exceptional quality of life without worrying about your tax obligations. 

The key is staying informed, planning ahead, and getting professional help when needed. France’s tax system, combined with US expat provisions and the tax treaty, typically results in fair overall tax treatment that won’t derail your French adventure. 

Need help navigating US expat taxes in France?  

Whether you’re just moving to France, have been there for years, or are behind on filings, we can help. No matter how late, messy, or complex your return may be, you’ll have peace of mind knowing that your taxes were done right. 

Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.

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This article is for informational purposes only and should not be considered tax advice. Tax situations vary greatly, and you should consult with a qualified tax professional for advice specific to your circumstances.