Banking, Money and Taxes in France
The banking and tax systems in France are well-managed, easily navigable for expats and highly sophisticated. The largest difficulty foreign nationals may encounter is negotiating the language barrier, but even so, English speakers in the financial sector can usually be found with relative ease.
Money in France
As is the case in all EU member-states, the official currency in France is the euro (€). One euro is divided into 100 cents.
Notes: €5, €10, €20, €50, €100, €200 and €500.- Coins: €2 and €1, then 50, 20, 10, 5, 2 and 1 cents
Foreigners in France should note that large numbers are written with full-stops (.), and decimal places are denoted with a comma (,). For example, five million would be written 5.000.000, and twenty euro and ten cents would be written €20,10.
Most all debit and credit cards are accepted in France, and ATMs can be found nearly everywhere, and generally offer the best exchange rates (transaction charges do exist for international card use, and can quickly add up).
Otherwise, expats and travellers can exchange cash at standard bank branches, exchange bureaus (bureaux de change), and even in post offices – which surprisingly offer some of the best rates.
Banking in France
Expats will find a healthy selection of local and international banks in France; both uphold high service standards and offer modern conveniences, like Internet and telephone banking. Furthermore, both usually have multilingual support staff, and in heavily expat-favoured areas, like the French Riviera, foreigners will even find local banks that cater specifically to English speakers (i.e. Banque Populaire Cote D’Azur).
Whether you prefer to use a local or an international bank is a decision that varies depending on your individual priorities. Local French banks pay no interest, but there is usually only a small monthly charge for maintaining the account package.
Expats living in France can open either a resident’s or non-resident’s account (compte non-résident).
Non-resident’s accounts are best suited to those living less than three months in the country, or those who cannot provide proof of employment or a residence permit. These accounts are generally more restrictive than resident accounts and tend to have no overdraft facility. Furthermore, they often demand a higher initial opening deposit.
Not all bank branches can grant non-resident accounts, you’ll need to find an “international branch” to do so.
There are three primary types of bank accounts in France:
- Private current accounts (compte courant, compte à vue or compte de depôt) equivalent to an individually-held, standard cheque account. The holder can receive payments, make deposits and authorise withdrawals. No interest in paid on this account.
- Deposit accounts (compte sur livret, or Livret B) primarily take the function of a savings account to store funds not required immediately.
- Joint accounts are a fantastic option for couples, or those who prefer to manage their finances as a unit.
Banking hours in the prominent urban centres are generally from 8.30am or 9am until 4pm tor 5.30pm, Monday to Friday. In more rural areas bank hours may vary.
Cheque books and debit cards (carte bleu – CB) are standard features that come with most French bank accounts, and both are readily accepted in France, though post-dated cheques are not in use and are illegal. Furthermore, bouncing a cheque is taken very seriously in France, and equates to fraud.
In France, it is possible to pay recurring bills via automated cheque transfers. To do this, you simply need the banking details of the party you are paying, known as the RIB (Relevé d'Identité Bancaire - includes the account number, bank code, and the sort code). If you would like to have a payment automatically deducted from your account regularly, you can issue a once-off authorisation for a TIP (Titre Interbancaire de Paiement).
Opening a bank account in France
Opening a bank account in France is simple, but the requirements vary slightly depending on the type of account you’ll be opening and with which bank you’ll be managing your money in France.
Opening a non-resident’s bank account in France
- Proof of identity - A passport, and in some cases a birth certificate.
- Proof of residency (i.e. a utility bill)
- References (a letter of recommendation from a financial institution - not always needed, but is always helpful)
- Initial deposit - Don't be surprised if this is as high as 8,000€ or equivalent of about $10,500.
Opening a resident’s bank account in France
- Proof of identity - Passport or if you are an EU citizen, an EU card, plus utility bill, and in some cases a birth certificate.
- Proof of earnings or status. This usually means your work contract, proof of earnings, or a student card. If you are retired you may need to provide proof that you can sustain yourself in France.
- Resident status. (carte de sejour)
- References (a letter of recommendation from a financial institution - not always needed, but is always helpful)
Taxes in France
‘Compulsory deductions’ is the combined term for income tax and social security deductions. Taxes are imposed on those who work, reside and invest in France. There exists a small tax on wealth applicable to a heritage of over €750,000.
Roughly 21 percent of a resident's gross income will go into social security deductions; there is however, a further income tax of between 5 and 40 percent on net income. This progressive system is tiered, which means those with a high income will pay significantly more tax than a middle or low income worker. Those who own property or are self-employed will be subject to additional taxes, making starting a business in France a slightly unattractive proposition.
It is important to remember that income tax must be declared separately from social security contributions. It is advisable to set aside the expected amount every month so that when tax comes due there is enough cash available to pay the collector.
Recovering Value Added Tax (VAT) upon leaving France
All EU member states will pay VAT for goods one take out of the region when a person leaves the EU. For expats who only intend to stay a few years, it is worth contacting a VAT expert to discover what one will be entitled to claim, especially as this can translate into a hefty sum.
