The withholding tax (PAS)

Date of update


On 1 January 2019, the government introduced the withholding tax (PAS) to modernise the payment of income tax.

It allows tax to be paid on income in the same year that it is earned.

Employers collect tax on the monthly income of employees based on the rate calculated and communicated by the tax authorities. The amount of tax paid is shown on the payslip.


Who is affected by withholding tax?


The withholding tax regime  applies to individuals whose country of residence for tax purposes is France.

If the conditions of tax residency in France are not met, foreign employees are considered as non-resident for tax purposes. Withholding tax does not apply to them.

Unless otherwise provided for in a tax treaty, non-resident employees who receive income in France are subject to deduction at source.


Applicable tax rate


The tax rate corresponds to that calculated when completing the latest French tax return.

[Married couples and civil partners can select either a common tax rate for the couple or a separate rate for each individual, depending on their income.

Taxpayers may ask the tax authorities to adjust the rate according to their circumstances (upwards or downwards), in which case a new rate will be calculated. The employer must apply the new rate within a maximum of two months.


To request an adjustment to your tax rate, visit the official tax website



New arrivals in France


If they have not filed a tax return in France, the default rate applicable to new arrivals is the non-personalised rate, known as the “neutral rate”.

This rate is also applied to those returning to France after having lived abroad for more than three years,

This neutral rate is determined according to a rate scale that does not take into account family situation, income or expenses. It varies according to the taxpayer’s place of residence.

Feel free to consult the default rate scale applicable to taxpayers resident:

This rate is sometimes inappropriate as it does not take into account the individual’s family situation or the fact that the year of arrival is a partial year with a favorable tax rate.

In order to obtain a personalized rate and a tax number, the newcomer or his/her legal advisor has the option of filing a 2043 form (paper version only) directly with the relevant Personal Income Tax Department.

Download the form

Self-employed workers


Self-employed individuals pay tax on the income earned in the current year in the form of advances calculated by the tax authorities based on their last French tax return.

They have the option of paying these advances monthly or quarterly.

If they set up a company in 2019, they can choose between:

  • Paying the first advance when the business is launched, by estimating its profit.
  • Waiting until September of the following year.

Doing business in French overseas departments and regions


In addition to access to the full range of support measures for companies operating throughout France, the government has its own provisions for investment aid in the overseas departments and regions (Guadeloupe, Martinique, French Guiana, Reunion Island and Mayotte), an innovation tax credit and a research tax credit at higher rates than in mainland France, and specific measures for exemption from social security contributions.

Companies setting up in the overseas departments and territories (Guadeloupe, Martinique, French Guiana, Reunion and Mayotte) can benefit from special tax measures and in particular:

  • An allowance for the company director subject to income tax:
    • 30% for a company established in Guadeloupe, Martinique or Reunion Island, not to exceed €2,450;
    • 40% for a company established in Guiana or Mayotte, limited to €4,050.
  •  Tax reductions or tax deductions for productive investments in overseas France;
  • Tax credits for productive investments in overseas departments.

For more information, please visit the website impô and the BPI website


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