French Guiana

In French Guiana, employers face various tax obligations, including payroll tax, social security contributions, and income tax withholding. Understanding these requirements is crucial for compliant payroll processing.

Payroll Tax (Taxe sur les Salaires)

This tax applies to employers in French Guiana who are not subject to VAT or are partially VAT taxable below a certain threshold. The tax rate is generally 4.25% of the gross salary. However, higher rates apply to salaries exceeding specific thresholds. As of February 5, 2025, the exact 2025 thresholds are pending publication of the 2025 budget law. Once published, they will be available on official government resources. Previously, in 2024, the higher rates were 8.5% for salaries between €8,020 and €16,013 and 13.6% for salaries above €16,013.

Social Security Contributions

Employers and employees share the responsibility for social security contributions. The employer's portion is estimated around 45% of the gross salary. The rates and ceilings for different branches of social security vary, influencing the overall percentage. Mandatory additional medical coverage contributions made by the employer are subject to taxation. The employee's share is generally between 20% and 23% of their gross salary.

Income Tax (Prélèvement à la Source - PAS)

French Guiana follows the "Prélèvement à la Source" system, which makes employers deduct income tax directly from employees' salaries. Employers must declare these withholdings monthly via the Déclaration Sociale Nominative (DSN) system. This declaration also covers social security contributions and other payroll information. The DSN deadline is typically the 5th of the following month.

Other Employer Obligations

Employers in French Guiana also have responsibilities concerning the minimum wage (SMIC), the 35-hour workweek and its associated overtime rules, and compliance with the General Data Protection Regulation (GDPR) related to employee data. Additionally, they must follow the French Labor Code (Code du Travail) and the annual Social Security Financing Law (Loi de Financement de la Sécurité Sociale) for up-to-date contribution regulations.

Additional Considerations

• French Guiana's Status: French Guiana is an overseas department and region of France. Consequently, French employment and tax laws apply.
• 2025 Finance Bill: France's 2025 Finance Bill, published on October 10, 2024, introduces several tax measures that might impact businesses operating in French Guiana. Staying updated on these changes is crucial.
• Per Diem: For business travel, employers can provide tax-free per diem allowances to employees to cover accommodation and food expenses.

It's recommended to consult official government resources or seek professional tax advice for the most up-to-date information, as regulations can change. The provided information is current as of February 5, 2025.

In French Guiana, employee tax deductions, known as précompte professionnel, are calculated based on the employee's actual taxable income and deducted directly from their salary each month. This system ensures that increases in gross pay always result in a net increase, not a decrease as was sometimes experienced with older tax tables. Specific deductions and thresholds depend on individual circumstances such as marital status, dependents, and income level.

Income Tax (Impôt sur le revenu)

The French Guiana tax system employs a progressive tax system, meaning higher earners pay a larger percentage of their income in taxes. This system ensures a fairer distribution of the tax burden based on ability to pay.

Tax Rates and Brackets

While specific tax brackets change each year, the underlying principle of progressively increasing rates for higher incomes remains constant. As of 2025, these brackets are subject to the finalization of the 2025 Finance Law. You can consult the official Impots.gouv.fr website closer to the tax season for the most up-to-date details on tax rates for the 2024 tax year (filed in 2025).

Tax Credits and Reductions

Several tax credits and reductions are available to reduce the overall tax burden. These credits and reductions incentivize specific behaviors and expenditures considered beneficial by the government, such as charitable giving, childcare costs, and home improvements for energy efficiency.

• Donations to Charities: A tax reduction is available for donations to registered charities. You can claim 66% of the donation amount as a tax reduction, up to a limit of 20% of your taxable income. Any excess can be carried forward for five years.
• Childcare Costs: Families with young children can benefit from a tax credit for childcare costs. A percentage of eligible expenses can be deducted, often subject to an annual cap. The amount of the credit depends on factors such as the child's age, number of children, and household income.
• Home Renovation for Energy Efficiency: Tax credits can incentivize homeowners to make energy-efficient improvements to their homes, such as installing insulation, solar panels, or energy-efficient heating systems. The conditions and amounts of these credits are subject to change, so checking the latest regulations is essential.

Social Security Contributions (Cotisations sociales)

Employees in French Guiana also contribute to social security, covering areas like healthcare, retirement, and family benefits. These contributions are automatically deducted from salaries and are mandatory for both employees and employers.

Contribution Rates and Calculation

Similar to the income tax system, social security contributions follow a percentage-based structure. The specific percentages vary depending on the type of contribution (healthcare, pension, etc.), and thresholds may apply. The employer also makes mandatory contributions for each employee. It's essential to keep in mind that contribution rates are reviewed and sometimes adjusted annually. Therefore, confirming the latest applicable rates when calculating your obligations is always advisable.

Other Deductions

Other potential deductions may apply depending on your specific situation. These could include deductions for certain types of professional expenses, contributions to specific savings plans, or alimony payments. Consulting the latest tax regulations or speaking with a tax advisor is essential to ensure you claim all applicable deductions and minimize your overall tax liability.

Tax Return Filing and Deadlines

As an employee in French Guiana, you typically do not need to file a separate tax return for income tax and social security contributions already deducted at source. However, you will file an annual tax return with French tax authorities declaring your worldwide income and claiming eligible deductions and tax credits not factored into the withholding process, like those for charitable giving and some childcare costs.

Deadlines

The standard deadline for filing your income tax return in France is typically in May or June of the following year. However, French Guiana, being an overseas department, may have specific deadlines. Checking the official tax authority website or consulting a tax professional to confirm the precise deadline for the given year is crucial.

Tax Resources and Assistance

Navigating the French tax system, even as an employee, can be complex. Numerous resources are available to help you understand your obligations and optimize your tax situation.

• Official Tax Authority Website: The official French tax authority website (impots.gouv.fr) is a valuable source of information on tax laws, regulations, and filing procedures.
• Tax Professionals: A qualified tax advisor can provide personalized guidance based on your specific situation, helping you navigate deductions, credits, and other aspects of the tax system.
• Employer of Record Services: If you work for a company using an Employer of Record in French Guiana, they typically handle the complexities of payroll and tax compliance on your behalf, simplifying the process for you.

This information is current as of February 5, 2025, and might change with updates to tax laws and regulations. Always verify the most up-to-date information with official sources or qualified professionals.

French Guiana does not apply Value Added Tax (VAT). It is one of the French overseas territories exempt from this tax. Other French territories where VAT is not applicable include Mayotte, New Caledonia, Saint-Martin, Saint-Pierre-et-Miquelon, and Wallis and Futuna.

VAT Rates and Registration

As VAT is not implemented in French Guiana, there are no VAT rates or registration thresholds. Businesses operating in French Guiana do not need to register for VAT or collect it on their sales.

Filing and Deadlines

Due to the absence of VAT, there are no VAT filing requirements or deadlines for businesses in French Guiana.

Exempt Goods and Services

The concept of exempt goods and services is irrelevant in French Guiana in the context of VAT, as the tax itself doesn't exist in the territory. All goods and services are effectively exempt from VAT.

Other Taxes in French Guiana

While VAT is not applicable, other taxes are levied in French Guiana, similar to mainland France. These include:

• Income Tax: Both individuals and businesses are subject to income tax, with rates similar to those in mainland France. A tax allowance is applied to residents of French Guiana.
• Corporation Tax: Companies operating in French Guiana are subject to corporation tax, again with rules similar to mainland France.
• Social Security Contributions: Both employers and employees contribute to social security.
• Property Taxes: Owners of property in French Guiana are subject to property taxes.

It is important to remember that tax laws and regulations can change. For the most up-to-date information, it's always recommended to consult with a tax advisor or refer to official government resources.

French Guiana offers various tax incentives to attract businesses and investment. These incentives range from exemptions and credits to deductions, targeting specific sectors and activities.

Corporate Tax Incentives

• Corporate Income Tax Exemptions: Companies can benefit from exemptions from corporate income tax, specifically Young Innovative Companies (JEI), Young Creative Companies (JEC) and Young University Companies (JEU), created until December 31, 2023. Companies created on or after January 1, 2024, are no longer eligible for this exemption.
• Property Tax Exemptions: JEIs, JECs, and JEUs established up to December 31, 2025, may qualify for exemptions from property tax on built-up properties and business property tax (CFE) for seven years, subject to local authority approval.
• Payroll Tax Deduction: A specific payroll tax deduction is available for businesses operating in French Guiana, particularly beneficial for the film industry.
• Reduced Social Security Contributions: Newly established companies can benefit from reduced social security contribution rates.

Sector-Specific Incentives

• Enhanced Competitiveness Scale: Businesses with fewer than 250 employees and annual sales under €50 million in specific sectors (agriculture, fishing, industry, environment, agronutrition, renewable energy, catering, tourism, research and development, ICT, press, audiovisual production) can benefit from this scale. In French Guiana, this also includes accounting, business consulting, engineering, and technical studies activities.
• Film Industry: Besides the payroll tax deduction, financial support is available from the Centre National du Cinéma and the Territorial Authority of French Guiana. The national and international tax credit, C2i, is also applicable.
• Green Energy Investments: Tax credits ranging from 20% to 60% are available for investments in green energy projects, depending on company size and location. This applies to projects with authorization applications submitted on or after September 27, 2023, and approved by December 31, 2025. The credit covers tangible and intangible investments.
• Research and Development (R&D): Tax credits are offered for R&D projects, encompassing investments in renewable energy initiatives.

General Tax Provisions and Deductions

• No VAT: Currently, Value Added Tax (VAT) does not apply in French Guiana.
• Payroll Tax: Applies to employers based in France who are VAT-exempt or whose VAT liability covers less than 90% of their prior year's income. This primarily affects sectors such as banking, insurance, healthcare, associations, and non-profit organizations. A progressive scale is applied to the gross remuneration paid to each employee to calculate the annual payroll tax.
• Tax Deductions: French Guiana offers the same deductions as mainland France. This includes deductions for mortgage interest, childcare costs, and energy-efficient home improvements.

Application Procedures

Application procedures vary depending on the specific tax incentive. For example, green energy investment tax credits require an authorization application, while certain exemptions and the enhanced competitiveness scale are contingent on meeting specific criteria related to company size, activity, and location. Contacting local authorities or consulting with tax professionals is advisable to determine eligibility and navigate the application process for specific incentives. Information on general tax compliance and procedures can be found on the French tax authorities' website.