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France: Individual tax measures enacted for 2019

France: Individual tax measures enacted for 2019

The Finance Law for 2019 (ref 2018-1317 of 28 December 2018 and promulgated on 30 December 2018) includes measures that concern individual taxpayers. The provisions generally have an effective date of 1 January 2019.


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Modification of “exit tax” regime

The existing provision referred to as the “exit tax” allows France to impose tax on the unrealized capital gains on shares and certain financial instruments owned by individual taxpayers who leave France if afterwards, the individuals sell the shares or the financial instruments before the end of a time period (set at 15 years).

The Finance Law for 2019:

  • Reduces the time period during which the exit tax could apply to two years (or five years for taxpayers whose aggregate value of shares exceed €2.57 million on the transfer date)
  • Expands the conditions under which no immediate payment of the exit tax is required upon the taxpayers’ exit from France

These modifications only apply to individuals transferring their tax residency outside France as from 1 January 2019. The 15-year time period still applies to individuals having left France before 2019.


Other measures affecting individual taxpayers and having an effective date of 1 January 2019 include:

  • The introduction of a “PAYE” system for individuals as of 1 January 2019—individuals are now subject to a monthly income tax withholding on their various types of income (at a rate based on their gross income for 2017) and will receive in January an amount equal to 60% of certain of their tax credits relating to the year.
  • The repeal of the dwelling (or inhabitation) tax (taxe d’habitation) which will be progressively phased out for approximately 80% of individual taxpayers in 2020.


For more information, contact a tax professional with the KPMG member firm in France (KPMG Avocats):

Mustapha Oussedrat | + 33 (0) 1 55 68 48 01 |

Patrick Seroin | + 33 (0) 1 55 68 48 02 |

Sophie Fournier-Dedoyard | + 33 (0) 1 55 68 48 24 |

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