Once you turn into a authorized resident of France, you turn into eligible for state healthcare. Should you work in France both salaried or employed, you then’ll pay a contribution in direction of healthcare through social safety contributions. However if you happen to don’t have an revenue in France, then you could be required to pay a PUMA healthcare tax in France. We requested Amy Witherbee, a monetary knowledgeable who works with expats in France in addition to French nationals seeking to relocate to France – what’s the PUMa tax, and who does it apply to?
The French healthcare system
France has a superb well being care system, and most expats think about it to be one of many advantages of residing right here. The system is funded by social expenses on the earnings of everybody who works right here through social safety contributions deducted from revenue however for some residents, the contribution is made through the so-called PUMa tax. PUMa stands for Safety Universelle Maladie, however the tax is extra formally often known as the cotisation subsidaire maladie (CSM). Additionally it is typically referred to informally because the taxe des rentiers.
Working, finding out or retired in France
Most French residents and plenty of expats mechanically be a part of the French well being system by working whether or not salaried or self-employed, receiving a French pension, or by being enrolled in class or college. Some expats are enrolled within the state care system in the event that they fall outdoors of those standards as a result of their residence nation’s social safety system covers them e.g., the UK. These nations have a reimbursement association which means you seemingly be exempt from CSG or CRDS funds and nonetheless be capable to entry the French public well being care system.
Should you aren’t paying into the general public well being care system in any nation and you aren’t a scholar, a retiree, or receiving different advantages, you might be nonetheless anticipated to contribute to the French well being care system. Not utilizing it doesn’t exempt you from the social expenses! The French state expects that each one these with means ought to contribute to maintain the system sturdy and accessible to all. And that’s the place the PUMa tax is available in.
Who’s required to pay the PUMa healthcare tax in France?
The primary group who’re eligible to pay PUMA tax are early retirees with ‘capital’ revenue (e.g., from investments for instance from renting out a property, revenue from shares) over a given threshold. Retirement pensions, which you declare in your French revenue tax declaration aren’t included.
PUMa tax eligibility additionally applies to those that are employed (typically self-employed) however not incomes sufficient to satisfy the minimal however have giant funding incomes. It will possibly additionally embody small enterprise homeowners who’ve chosen to take most of their income as dividends, reasonably than wage or wages.
The brink is calculated annually and known as the PASS (plafond de sécurité social or “social safety ceiling”), a quantity which will increase annually with inflation. For 2025, the PASS was set at 47,100 €.
How is the PUMa tax calculated?
The PUMa tax applies to your revenue from investments (together with dividends, capital features, curiosity and a few rents) – however there’s an allowance in opposition to the primary 50% of PASS (e.g., for 2025 it’s 23550 €). And the tax price is capped at eight instances the PASS (e.g., for 2025 it’s 376800 €).
The tax price, after allowances, is 6.5% (2025), nonetheless it isn’t merely utilized. The tax authorities will think about different components – and sure, it’s difficult. Should you’re into math, the official formulation is: Tax = 6.5% x (A-0,5 x PASS) x (1-R / (0,2 x PASS)), A being the quantity of your funding revenue (as much as the ceiling) and R is your earned revenue.
If you’re not eager on math, right here’s an instance of the way it may work: Your family experiences no wage or retirement revenue in France, however you report 400,000€ of funding and non-professional rental revenue. The second a part of the formulation, which might provide you with a break for having some earned revenue, can be “1”. Your tax invoice can be 6.5% of the quantity of your revenue between the 50% threshold and the ceiling: 376,800€ – 9,420€, or 367,380€. This provides you a complete tax invoice of about 23,880€.
Alternatively, somebody who has earnings of 8,000€ and 400,000€ of funding revenue will be capable to multiply that 8,000€ by the 20% threshold to get a proportion of their funding revenue discounted, about 85%, in reality. Because of this, this earner’s invoice can be about 3,600€.
The American exception
Theoretically, American retirees in France ought to be paying PUMa tax. No reimbursement association is feasible between the 2 nations as a result of the US doesn’t have a full public well being system. However so far the French tax authorities have included American retirees who’re reporting revenue from US retirement accounts, pension or social safety among the many different retirees. Because of this, these taxpayers haven’t been requested to pay PUMa.
Should you’d like recommendation on easy methods to handle your funds to maximise your revenue and minimise your taxes, remedy finance and tax issues earlier than they come up, get in contact with Amy Witherbee at sanderlingexpat.com
