As a non-resident, how does withholding at source apply to my earnings or pension income?
If you are a tax resident of France, your wages, salary and/or pension are subject to withholding at source (PAS).
If you are not a tax resident of France, a special withholding at source system for non-residents (RAS NR) applies to income that is considered to be from French sources and taxable in France in accordance with international tax treaties.
Depending on the country you live in, see I'm non resident. What are the main elements of income to be reported? on impots.gouv.fr under International > Individual > I am not a resident of France but I have interests in France.
This non-resident withholding at source is deducted by your employer or pension fund. It is calculated by income bracket at rates of 0%, 12% and 20% (or 0%, 8% and 14.4% for income in French overseas départements), using an annual scale and after applying an allowance of 10%.
For more details on the non-resident withholding scale, see I am non-resident. How is the withholding at source deducted by my employer or pension fund calculated? How should I file my return?
If you are not a tax resident of France:
- Enter your wages and salary in sections 1AF and following of income tax return no. 2042.
- Enter your pension income in section 1AL and following.
Assuming your employer or pension fund has issued your Single Staff Reporting Statement (Déclaration sociale nominative – DSN) or your Withholding Tax for Other Income Statement (Prélèvement à la source pour les revenus autres – PASRAU), the RAS NR amount withheld from your income should automatically be entered in box 8TA.
Note : this RAS NR amount entered in box 8TA is not the same as the amount withheld at source on income earned by tax residents of France (boxes 8HV, 8IV, 8JV and 8KV).
As a result, you may need to adjust or add to the information entered in section 8 (Prélèvement à la source et divers) of income tax return no. 2042.
In notice no. 2041-E, you will find examples to help you correctly fill in the withholding at source return (table).
Income subject to the first two RAS NR withholding brackets is not used to calculate tax owing
The 0% and 12% withholding brackets have an exempting effect: the amount of net income (after the 10% allowance) that is subject to these two brackets will not be used to calculate your tax.
However, amounts withheld at the 20% rate (or 14.4% for overseas départments) will be directly deductible from your income tax assessment. The withholding at source deducted from your income is therefore only taken into account on your notice of assessment in the amount subject to this top bracket.
As a result, if you request to have the average tax rate applied (see What is the average tax rate and do I qualify for it ?), only the 20%-rate portion of your withholdings will be returned to you in the event your tax assessment is lowered after the average rate is applied.
You are advised to check the box for the average rate of taxation, as it will only be applied if it the more favourable option for your situation.
In the event of an adjustment to non-resident withholding at source (Article 197B of the General Tax Code)
When your employer or pension fund withholds an amount at source from your income, it does so based on the applicable withholding scale. Here is the 2024 RAS NR scale :
- 0% for the portion of income under €16,820
- 12% for the portion of income between €16,050 and €48,790
- 20% for the portion of income above €48,790
The amount withheld at source should be calculated based on the total income of all household members combined, to which the three-bracket withholding scale is applied.
But when there are multiple income sources for a single household (and the payer of each income is not aware of the others), each payer applies the RAS NR withholding scale based only on the income it is responsible for.
For example:
* You receive income from two sources: one pays you €10,000 and the other €14,000 (after the allowance is deducted). Each payer applies the RAS NR withholding scale in isolation.
The amount withheld from you at source is therefore: (€10,000 x 0%) + (€14,000 x 0%) = €0
* However, the withholding amount applicable to your total combined income for the year should be calculated by adding together the two sources (for a total of €24,000) and applying the withholding scale as follows:
- 0% for the portion under €16,820
- 12% for the rest: (€24,000 – €16,820) x 12% = €862.
In this case, an adjustment will be made to collect the amount that should have been withheld at source (€862).
UPDATED DINR PART - FEBRUARY 22, 2024