Do I Pay Forex Trading Taxes In France?

Best brokers for Forex trading in France

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50, $100 (for UK clients)

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

Study Review

3

9.1/10

Study Review

Minimum deposit:

$1

Bonus for deposit:

0%

Regulation:

FCA, BaFin, ASIC, MAS, CySec, FINMA, BMA, CFTC, NFA

Review

IG Markets has been providing brokerage services for retail traders since 2014. It was established in 1974 in London to work with professional traders. It is a part of the IG Group with representative offices in 17 countries. IG Markets stocks are traded on the London Stock Exchange as a part of the FTSE 250 index. The broker is regulated by FCA (Financial Conduct Authority | the UK), CySec (Cyprus Securities and Exchange Commission), ASIC (Australian Securities and Investments Commission), BaFin (the Federal Financial Supervisory Authority | Germany), FINMA (Swiss Financial Market Supervisory Authority), and NFA (National Futures Association). The IG Group global representative office is supervised by BMA (the Bermuda Monetary Authority). The broker provides services of trading Forex and different CFDs through MetaTrader 4 and its in-house platforms for retail and professional traders.

Pros/Cons

•Regulated activities and participation in compensation funds;

•No minimum deposit requirements when opening an account with the international division;

•Leverage is available for trading currencies and CFDs;

•Wide range of trading assets and markets;

•Fee rebates for new and active existing clients with large trading volumes;

•Floating spreads from 0.6 pips for retail Forex traders;

•Bonuses for new clients and partnership programs for different client categories.

•The broker can reject opening accounts to traders with low capital or insufficient knowledge of derivatives trading;

•Deposits and withdrawals can’t be made with e-wallets, electronic payment systems, or cryptocurrencies;

•Trading conditions differ for various countries, so you have to look for the broker’s website in your country.

Study Review

Forex trading taxation in France - How it works

How your income is taxed in France depends on whether you trade Forex professionally or occasionally. If you trade professionally, you pay capital gain and social security taxes on your trading profits, which is about 30%. If you trade occasionally, you pay income tax at the progressive income tax rate, which varies from 0% to 45% depending on your income level.

In France, the capital gains tax rate is 30%, which also includes approximately 17.2% in social security levies. The social charges will not apply to French residents living in the European Economic Area (EEA) who are not covered by the French social security system, but they will still be subject to a 7.5% solidarity tax.

French traders who wish to maximize profits while minimizing tax obligations should consider organizing their Forex trading activities as a business that will be subject to corporate tax. This can involve opening a separate bank account specifically for Forex trading activity and maintaining thorough records of all trades, costs, and profits. To make sure you take advantage of all available tax credits and deductions, you should also think about consulting a tax expert.

What are the tax rates for Forex trading income in France

In France, the tax rate for trading income as an occasional Forex trader depends on your income level. Check the table below for more details.

How much trading income is tax-free in France?

In France, there is no specific tax-free amount for trading income. In some cases, taxable income above €10,225 from trading activities is subject to taxation. Forex traders in France are required to report their trading income and pay taxes accordingly.

Subjects of taxation in France

You pay taxes on your worldwide income, no matter where it was earned, if you are a French fiscal resident. However, non-residents are only subject to taxation on their income that comes from France. For non-residents, the tax rate on income originating from French sources is 20% for income up to €27,794 and 30% for income over that amount. This covers both capital gains and income for the solidarity tax.

The general rule used by the French tax authorities states that an individual is considered a resident if they spend 183 days or more in France in a calendar year. However, this is not a definitive rule, and other factors such as family, main residence in France, and center of economic interests are also considered. Individuals and legal entities pay taxes in different ways. Corporations pay corporate taxes on their profits, whereas individuals pay income taxes on their earnings. In France, the corporate tax rate is 28% for businesses with less than €250 million in revenue and 31% for those with more than that amount.

Tax benefits and exemptions in France

Professional French traders are not eligible for any tax deductions on taxable profits, but occasional traders may be able to lower their taxes based on factors such as age, income level, and marital status. Additionally, in some cases, 50% of the total income from the sale of securities held outside of France is exempt from taxes.

Case studies

Let’s consider the following individuals, all of whom traded Forex during the 2023 tax year in France.

1. Marie, a software engineer employed full-time in France, dedicates her leisure time to active Forex trading, resulting in a profit of €15,000. Given that her primary occupation is not Forex trading, she falls into the category of occasional traders. Under French tax regulations, Marie is subject to tax on her Forex profits. Marie must report her Forex gains on her annual income tax return and will be taxed at a rate of 36% (including social contributions) on her profits

2. Pierre is a freelance graphic designer in France, supplements his income through day trading of stocks, and earns €8,000 in profits. As a self-employed individual, Pierre is required to register as a micro-entrepreneur and declare his trading income. The French micro-entrepreneur tax regime simplifies the taxation process, with Pierre paying a flat-rate tax of 28% on his trading income. The applicable rate is determined based on his overall business revenue, providing Pierre with a straightforward and potentially lower tax burden

3. Antoine, a part-time farmer in rural France, supplements his income by trading commodities and earns €12,000 in profits. With dual roles as a farmer and trader, Antoine is eligible for certain tax advantages. Choosing the agricultural flat-rate taxation system, he benefits from reduced tax rates on his trading income. This special taxation allows Antoine to declare his trading income within the agricultural taxation framework when filing his annual tax return

Taxation tips for Forex trading in France

As a new Forex trader in France, here are some tips from TU experts that will help you optimize your tax obligations:

1. Understand the tax system: Before you begin trading in France, you should familiarize yourself with the country's tax system. You can seek expert advice to help you navigate the system and avoid potential pitfalls

2. Keep accurate records: Maintain a record of every trade you make, including any gains or losses and any costs incurred from your trading endeavors. This will allow you to accurately calculate your tax obligations

3. Consider tax deductions: You can deduct a portion of the expenses related to your trading activities, such as phone and internet bills, office rent, and computer equipment. Be sure to keep accurate records of these expenses

4. Seek professional advice: Because tax laws can be complicated, it is a good idea to consult a tax expert. They can guide you through the tax system and ensure that you meet all of your obligations

5. Maintain a separate bank account: Setting aside money for your Forex trading endeavors should be done in a separate bank account. This will assist you in monitoring your gains and losses as well as any costs associated with your trading endeavors