Banking, Money and Taxes in France

The banking and tax systems in France are well-managed, easily navigable for expats and highly sophisticated. The biggest 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

money for banking in France (euro)

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 EUR.
  • Coins: 2 and 1 EUR, and 50, 20, 10, 5, 2 and 1 cents.

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 20 euro and ten cents would be written 20,10 EUR.
 
Most debit and credit cards are accepted in France. ATMs can be found nearly everywhere and generally offer the best exchange rates (transaction charges for international card use can quickly add up). 
 
Otherwise, expats and travellers can exchange cash at bank branches, bureaux de change, and even in post offices, which surprisingly offer highly competitive rates. 
 

Banking in France

 

Expats will find a healthy selection of local and international banks in France. All uphold high service standards and offer modern conveniences like Internet and telephone banking. Most 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 (e.g. Banque Populaire Cote D’Azur).
 
Whether an expat prefers to use a local or an international bank is a decision that depends on their priorities.

Local French banks pay no interest, but there is usually only a small monthly charge for maintaining an account. Expats living in France can open either a resident or non-resident account (compte non-résident). 
 
Non-resident accounts are best suited to those living in the country for less than three months, 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. They also often demand a higher initial opening deposit.
 
Not all bank branches can grant non-resident accounts, so expats will need to find an international branch to do this. 
 
There are three primary types of bank accounts in France:
  • Private current accounts (compte courantcompte à vue or compte de depôt) are equivalent to an individually held, standard cheque account. The holder can receive payments, make deposits and authorise withdrawals. No interest is paid on this account.
  • Deposit accounts (Livret A - Interest net of taxes and social contributions up to €22,950,  compte sur livret, or Livret B and LDD -- Interest net of taxes and social security contributions up to €12,000) primarily function as savings accounts 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 urban centres are generally from 8.30am or 9am until 4pm tor 5.30pm, Monday to Friday.  Bank hours may differ in the rural areas.
 
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. Post-dated cheques are illegal. Bouncing a cheque is also 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, expats simply need the banking details of the party they are paying, known as the RIB (Relevé d'Identité Bancaire - includes the account number, bank code and sort code). If they would like to have a payment automatically deducted from their account regularly, expats 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 and which bank is involved.
 
Opening a non-resident’s bank account in France may require the following documents:
  • Proof of identity - passport, birth certificate
  • Proof of residence -  utility bill
  • Reference -  a letter of recommendation from a financial institution (not always needed, but always helpful)
  • Initial deposit - this may be as high as 10,500 EUR
 
Opening a resident’s bank account in France may require the following:
  • Proof of identity - Passport or EU card (if expat is an EU citizen), plus utility bill and, in some cases, birth certificate
  • Proof of earnings or status. This usually means a work contract, proof of earnings, or student card. If retired, expats may need to provide proof that they can sustain themselves in France. 
  • Resident status (carte de sejour)
  • References (a letter of recommendation from a financial institution or your employer - not always needed, but 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. 
 
Roughly 21 percent of a resident's gross income will go into social security deductions; however, a further income tax of between five percent and 40 percent may be imposed 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 are subject to additional taxes, making starting a business in France a slightly unattractive proposition.
 
Expats are advised to remember that income tax must be declared separately from social security contributions. It is wise to set aside the expected amount every month so that there is enough cash available to pay the collector when tax is due.
 
Recovering Value Added Tax (VAT) upon leaving France
All EU-member states will pay VAT for goods taken 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 determine what one will be entitled to claim, especially as this can translate into a hefty sum.

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