Impôt, redevance, taxe: understand the subtle differences in French

Anybody who has received a payslip in France will have noticed the exhaustive detail listing all the social charges and taxes deducted from their gross pay.

They will probably also have heard claims that France is among the highest-taxed countries in the world.

However, this is not quite true.

Read more: Why France is surprisingly tax-friendly for individuals

A relatively high amount of people’s earnings comes off in levies of some kind or another, but most of these are technically social charges rather than taxes.

These, paid by both employer and employee, mostly go towards specific benefits for the employees, such as their pension, healthcare, family allowance or right to incapacity or unemployment benefits.

As French people are aware of the many taxes and charges they pay, and since the government is keen to ensure that people do not feel like they are being overtaxed, it is useful that the French language has adopted certain nuances to describe the different levies imposed.

These include the subtle difference between une taxe and un impôt.

Read more about taxes in France in The Connexion Tax Guide

How to distinguish taxe from impôt

Taxes fund the operation of a specific public service.

For example:

Taxe de séjour, (visitor’s tax) goes to the commune a person is visiting, to pay for tourist infrastructure.

Taxe sur les nuisances sonores aériennes (aircraft noise pollution tax) is paid by airlines that fly over built up areas. It pays for soundproofing.

Taxe d’enlèvement des ordures ménagères pays for the bin collection and rubbish disposal service.

Taxe sur les produits de la pêche maritime (maritime fishing tax) is paid by wholesalers buying fish and seafood. It pays for fishing subsidies

Unlike the similar redevance, however, a taxe usually has to be paid whether or not you actually use and benefit from the service it funds. Also there is not necessarily a real link between the actual cost of the service and the level of the tax.

On the other hand une redevance is an amount paid which directly pays for a service received. It must be specifically used for and proportional to the cost of the service the payer benefits from and only users of the service will pay.

Impôts are levies that go into the general budget coffers of the state at national regional and local levels. So, for example, education, defence, government administration and the national debt are all paid for by impôts.

The French nuclear deterrent and the fire service are among state services that are paid out of impôts rather than taxes.

The best-known impôts are impôt sur le revenu (income tax), impôt sur la fortune immobilière (property wealth tax) and impôt sur les sociétés (corporation tax).

Social Protection is paid by both

The behemoth of the French social protection system, including running the health and family benefits systems and Aspa income support for older people, partly comes out of taxes and partly from impôts.

These should both be distinguished from the ‘social charges’ (cotisations sociales) that people pay on work income and that confer direct ‘social’ benefits to the payer.

Having said that, some levies often lumped into the social charge category are really taxes as they confer no direct benefit to the individual but help fund the general social services and welfare programmes.

The main examples of the latter are contribution sociale généralisée (CSG) and contribution pour le remboursement de la dette sociale (CRDS), both of which are levied on people’s work and investment revenues.

Often actual names do not help…

The difference between taxes and impôts is moreover, often blurred by confusing names given to some of the levies people pay.

Taxe sur la valeur ajoutée (TVA – VAT in English) goes into the government’s general budget rather than paying for any particular service, so it is actually an impôt…

Similarly, taxe foncière and the recently reformed taxe d’habitation both go into the general budget of your local authority and do not pay for any particular service, so are also defined by money experts as impôts.

Given the number of taxes and impôts in France, it is perhaps not surprising that there are exceptions to the rules which by convention continue to be labelled illogically.

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