U.S. taxes for Americans in France

France has one of the most comprehensive U.S. tax treaties in the world, a long-standing totalization agreement, and one of the more confusing U.S. expat-tax landscapes — driven by the unique French Assurance-vie product, the relatively new PER retirement plan, and the on-again-off-again treatment of CSG/CRDS taxes.

This article covers the country-specific decisions for Americans living in France.

The income tax math

French income tax (Impôt sur le revenu) rates run 0% to 45%, plus the Prélèvements sociaux (social levies: CSG 9.2%, CRDS 0.5%, prélèvement de solidarité 7.5%) totaling ~17.2% on investment income. Combined top marginal rate on investment income is approximately 62%.

For salary income, French withholding (Prélèvement à la source) is now standard. The combined effective rate on a middle-income French salary including social charges is typically 30–40%.

For most Americans in France, FTC beats FEIE clearly:

• French tax exceeds U.S. tax on the same income.
• FTC carryforward accumulates.
• Roth IRA contribution remains available.

See FEIE vs. Foreign Tax Credit.

CSG/CRDS — now creditable (since 2019)

For years, the IRS took the position that French CSG (Contribution sociale généralisée) and CRDS (Contribution au remboursement de la dette sociale) were social-security-type levies and not creditable as foreign income tax. Practitioners and taxpayers disputed this.

In 2019, the IRS reversed position via a memorandum and confirmed via a 2020 publication: CSG and CRDS are now creditable foreign income taxes on Form 1116. Filers can amend prior-year returns (within the statute of limitations) to claim the credits they were denied.

For new filings, include CSG and CRDS in your Form 1116 calculation. This single change can shift a French expat's effective U.S. tax position by thousands of dollars annually.

The other social levies (prélèvement de solidarité, etc.) have less settled treatment — most practitioners include them as creditable since they're imposed on the same base as income tax. If in doubt, document the position with Form 8833 (treaty disclosure).

Assurance-vie — the French specialty

The Assurance-vie is the most popular French investment product — technically a life insurance contract that functions as an investment wrapper with extreme French tax advantages (tax-deferred growth, favorable estate-tax treatment).

For U.S. taxpayers, the Assurance-vie is mostly a problem:

• Not a foreign trust generally, but reportable as a foreign account on FBAR and Form 8938.
• The "fonds en euros" (euro-denominated guaranteed component) is usually fine — interest is U.S.-taxable annually, no PFIC issue.
• The "unités de compte" (investment fund units) inside an Assurance-vie are PFICs. The wrapper doesn't change PFIC analysis. Full Form 8621 reporting and 1291 tax on excess distributions.

The practical answer: a "fonds en euros" Assurance-vie can be a usable savings vehicle for Americans. An investment-fund Assurance-vie with unités de compte is generally a PFIC disaster.

If you have an inherited or pre-existing Assurance-vie with investment fund units, talk to a credentialed cross-border tax pro about PFIC cleanup or restructuring.

PER (Plan d'Épargne Retraite) — newer, still unclear

The PER was introduced in 2019, consolidating France's previous retirement-savings vehicles (PERP, Madelin, Article 83). Three "compartments": individual (PER individuel), collective (PER collectif from employer), and mandatory (PER obligatoire).

U.S. tax treatment is unclear and contested:

• Treaty Article 18 (pensions) may provide tax-deferral for U.S. purposes, similar to how it covers RRSP, SIPP, and similar plans.
• Investments inside the PER are typically French/EU mutual funds — PFICs without treaty protection.
• The IRS has issued no specific guidance on the PER yet (as of 2026).

Conservative practice: assume PER does not get U.S. tax deferral until proven otherwise; treat investments inside as PFICs; consider holding only individual stocks (not funds) inside the PER if possible.

PEA (Plan d'Épargne en Actions) — PFIC trap

The PEA is a tax-advantaged stock-trading account in France. Holdings inside are limited to European stocks and EU-domiciled funds.

For U.S. tax purposes:

• Not a recognized treaty vehicle. PEA tax-free status doesn't carry over.
• Investments inside are typically EU funds = PFICs.
• May be reportable as a foreign trust (3520/3520-A) — practitioners differ.

For Americans in France: skip the PEA, or hold only individual European stocks (not funds) inside if you really want one.

Livret A and other regulated savings accounts

Livret A, Livret de Développement Durable (LDDS), and similar French regulated savings accounts pay tax-free interest in France with a cap on balance.

For U.S. purposes: the interest is U.S.-taxable annually. Not creditable in France (no French tax was paid), so no FTC. Pure U.S. tax owed on the interest.

These accounts are FBAR-reportable. They're not PFICs (no fund holdings), so the U.S. complication is just the unfavorable interest taxation.

IFI — wealth tax on real estate

France's wealth tax (Impôt sur la fortune immobilière, IFI) applies to net real estate holdings above €1.3M, at progressive rates up to 1.5%.

For U.S. purposes: IFI is not a creditable income tax (it's a wealth tax). It cannot offset U.S. tax via FTC. It's also not deductible on Schedule A (foreign property tax is no longer deductible since 2018).

For high-net-worth Americans in France with substantial real estate, IFI is real money with no U.S. offset.

Social Security — totalization

The U.S.–France totalization agreement (in force since 1988) cleanly handles Social Security:

• Employed in France: French social charges paid; no U.S. FICA owed.
• Self-employed in France: French URSSAF contributions paid; no U.S. SE tax. Get a Certificate of Coverage (Form A1 or equivalent) from URSSAF.
• Retirement: aggregated credits, partial benefits from each system.

When you eventually retire and receive U.S. Social Security in France, U.S.–France treaty Article 18(1)(b) generally allocates the right to tax to the country of residence (France), with FTC on the U.S. side.

See totalization agreements.

PRIIPs and U.S. brokerage access from France

Since 2018, EU PRIIPs regulations effectively bar EU residents from buying U.S.-domiciled ETFs at retail brokerages. Your French bank or French broker won't sell you VTI or VOO.

The workarounds for Americans:

• Maintain a U.S. brokerage (Schwab International, Interactive Brokers) — PRIIPs doesn't apply because you're using a non-EU broker.
• Qualify as a "professional investor" with your French broker (knowledge tests + asset thresholds) — then PRIIPs doesn't apply.
• Buy individual stocks (not funds) — PRIIPs targets packaged products, not single equities.

For most expat Americans: use a U.S. broker for fund investing. Use French banks for cash and individual French stocks if desired.

Capital gains

France taxes capital gains in two ways:

• Flat tax (Prélèvement Forfaitaire Unique): 30% (12.8% income tax + 17.2% social charges) on capital gains, dividends, and interest.
• Election for progressive scale: optional, can be better for low-income years.

For U.S. purposes:

• Capital gains are U.S.-taxable at 0%/15%/20% + 3.8% NIIT.
• FTC offsets U.S. tax to the extent French tax was paid.
• NIIT is not creditable — remains a U.S. tax residual.

Estate planning

France has its own succession (inheritance) tax with rates up to 60% for non-related heirs. The U.S. and France have a 1978 estate tax treaty that mostly prevents double taxation but the interaction is complex.

French civil-law forced heirship rules can override your U.S.-style will: children are entitled to specific portions of the estate (réserve héréditaire) regardless of what your will says. This is a significant planning issue for Americans with French children and significant assets.

If you have substantial assets in both jurisdictions, cross-border estate planning with a French notaire and a U.S. estate attorney is essential.

State residency

French Carte de séjour (residence permit) and Avis d'imposition (French tax assessment) provide solid evidence of foreign residency for state-residency severance. For sticky states (CA, NY, NM, VA, SC), pair with the standard severance steps.

Common Americans-in-France mistakes

• Not claiming CSG/CRDS as creditable. Old guidance said no; current guidance says yes. Amend prior returns within the SOL if you missed it.
• Holding investment-fund Assurance-vie units. PFIC trap inside the wrapper.
• Buying a PEA or contributing to a PER without U.S. analysis. Often a tax disaster.
• Forgetting the totalization Certificate of Coverage for self-employed work.
• Filing without 1116 because "FEIE is enough" — usually leaves money on the table when CSG/CRDS could be credited.
• Treating IFI as creditable income tax. It's wealth tax — no U.S. credit available.
• Holding U.S. ETFs at a French broker that has to invoke PRIIPs and force sale.

Next steps

• FEIE vs. Foreign Tax Credit
• Foreign Tax Credit (Form 1116)
• Totalization agreements
• The PFIC trap
• Foreign mutual funds