France Expat Forum

EuroGuy
Joined 2016
Posts: 19

7 years ago

Retiree income taxes

7 years ago

Hello everyone - I tried a search on this topic but found nothing pertinent.

I have done some research on a possible French income tax scenario that I'd like to share, and get some comments and validation if possible.

The situation is as follows: retired couple have established tax residence in France. Their total income is USD 45K from US Social Security, and USD 55K from interest/dividend income. for a total of USD 100k (for round numbers).

The method I used to determine the French income tax liability comes from this publication: http://www.overseasretirementletter.com/issues/1312/orl-63-french-taxes.html - essentially the publication cites that total tax liability would be divided in 2 (myself and my wife) and each would be taxed for half of the total income - which would reduce the total taxes as compared to the total income being taxed a single time as it would avoid the higher marginal rates.

I have put together a spreadsheet accessible at this URL: https://docs.google.com/spreadsheets/d/1vC1Vf7PZ7CDV8DUQW_13R_qVCY6yNbdlHTOoJ0mcxH8/edit?usp=sharing - If you follow the math, I convert USD 100K to EUR 94K (the current conversion), and apply the tax table from the article above. What I come up with is EUR 8,670 per person in taxes, total of EUR 17,340, for an effective income tax rate of 18%. I calculated the US income taxes on the same amount of income using a commercial tax preparation software for the year 2015. The US income tax rate is 10% on USD $100K of income, which is lower than the French rate. My understanding is that the taxes paid in France would be credited to the US return yielding a zero tax liability situation for the US tax return since the taxes paid in France far exceed the taxes owed in the US.

I would welcome comments and feedback. My intention is to better understand income tax as a budget item for retirement as an expat. I've noted through research (and the spreadsheet URL highlights this) that income taxes in Europe are highly variable - and sometimes very surprising with respect to effective tax rates. For example, if my math is correct, I am very pleasantly surprised by the low income tax rate for France.

Cheers

Allianz Care

Flexible solutions allow you to tailor your cover to meet your needs and budget. Use Promocode: LIFE10 and get 10% off your international health insurance for life!
Get Quote

Allianz Care

Flexible solutions allow you to tailor your cover to meet your needs and budget. Use Promocode: LIFE10 and get 10% off your international health insurance for life!
Get Quote

Living in France Guide

Guide to Living in France covering expat life, local culture, finding a home, diversity and more.

France Forum
Join our France forum to meet other expats and talk about living in France.

Contribute
Help other expats and newcomers by answering questions about the challenges and adventures of living in France.

Best Places to Live in France

If you're thinking about living in France, here are the 15 Best Places to Live in France in 2023.

Healthcare in France

Expats often ask if health insurance is free in France or if you need health insurance to go to France. Here is basic information about the French healthcare system.

Cost of Living in France

Expats offer insight into the cost of living in France.

Moving to France Guide

Expats all over the world dream of someday making France their next destination. As with other countries, there is a lot of planning involved, and a lot of decisions to be made.

Real Estate in France

Real estate listings in popular cities and towns in France.

Pros & Cons of Living in France

Take off your rose-colored glasses and learn what expats have to say about the biggest challenges and the greatest rewards of living in France.

Retiring in France

Advice for people retiring in France.

10 Tips for Living in France

If you've recently arrived in France, here are 10 tips for digital nomads living in France.

Additional Information:

Visit our France Index for a Full List

Allianz Care

Flexible solutions allow you to tailor your cover to meet your needs and budget. Use Promocode: LIFE10 and get 10% off your international health insurance for life!
Get Quote

Allianz Care

Flexible solutions allow you to tailor your cover to meet your needs and budget. Use Promocode: LIFE10 and get 10% off your international health insurance for life!
Get Quote

Contribute
Help others in France by answering questions about the challenges and adventures of living in France.