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A Taxing Story of French Taxes

By: Andrea Bouchaud

(photo by: libertycalling.net)

***Translation of photo: Liberty, Egality, Fraternity and Fiscal Invasion

Paris is about to become an even more expensive city in the next few weeks. It appears as though paying 19.6% VAT (value added tax) wasn’t high enough according to French officials. As of January 2014, the VAT will increase to 20% in all of France. I have not come across an official date this new VAT amount is going into effect. The VAT tax is a tax on the purchase price but is calculated prior to your purchase unlike a sales tax. What this means is that the price you see on the ticket is the price you pay at the register. If you don’t know already, French taxes are quite heavy and are on everything. I would not be surprised if this tax hike were to cause a strike. Sylvia Davis from French Entrée explores this new French tax along with others in her new blog post here.http://blog.frenchentree.com/2013/12/27/taxes-in-france-vat-increase-and-other-changes-coming-in-2014/

Another tax hike that is already causing strikes and dissidence amongst a small population in France is the passing of the 75% income tax on all high income earners. Anyone who is making 1€ million or more will have to give up 75% of their income to the French government. This means that if someone makes 1,000,000 € they have to pay 750,000 € in taxes and only get to take home 250,000 €. This bill which was first rejected in the courts about 1 year ago has been recently approved. France’s President François Hollande believes that taxing the ninny out of the wealthy that remain in France will help to reduce budgetary issues in France instead of actually putting a budget in place and maybe cutting a program or two (say, state paid child services and college- these can really go in my humble American opinion). If you’re going to be in France as a student than you have nothing to worry about but this is good information to know as I’m sure it will spark lots of debate and now you’ll have a heads up on this issue and can jump right into the conversation.

Bottom line is the French have an unhealthy obsession with taxes and they are making France a place that is getting harder and harder to live in. Studying abroad is probably the only way that you will ever be able to afford living in France. It is evident that making lots of money there won’t get you anywhere. So enjoy this time and be thankful that you are not a wealthy French person.

http://www.bbc.co.uk/news/business-25541739 (BBC covers this issue)