GuadeloupeTax Obligations Detailed

Employers in Guadeloupe must adhere to French labor and tax regulations, including social security contributions, income tax withholding, and VAT.

Social Security Contributions

Employers contribute between 22% and 35% of the employee's gross salary, depending on the specific program. Additionally, there's an 8.2% contribution for CSG (Contribution Sociale Généralisée). Employees also contribute between 20-23% of their gross salary, a 9.7% solidarity surcharge, and 6.9% for old-age insurance. Executive employees are also subject to APEC (0.06%) and CET (0.21% employer share) contributions on salary exceeding the social security ceiling.

Income Tax Withholding

Employers withhold income tax based on a progressive scale, ranging from 0% to 45%. The specific thresholds are subject to annual revaluation, with the 2025 figures expected following the publication of the 2025 budget law. For example, the 2022 thresholds were:

• 0% up to €10,225
• 11% between €10,226 and €26,070
• 30% between €26,071 and €74,545
• 41% between €74,546 and €160,336
• 45% above €160,336

Employee social security contributions are generally deductible from gross income when calculating taxable income.

Value Added Tax (VAT)

The standard VAT rate in Guadeloupe is 8.5%. Reduced rates of 2.1% and 5.5% apply to essential goods and specific products/services, respectively.

Payroll Tax

Employers not subject to VAT and located in mainland France or overseas departments pay payroll tax, calculated on remuneration using a progressive scale. The 2025 thresholds are pending the 2025 budget law's publication.

Other Employer Obligations

Employers must register with the Guadeloupe social security and tax authorities, file regular payroll tax returns, make timely payments, and provide mandatory benefits as required by French labor law. Additionally, employers manage payroll, ensuring accurate calculation, processing, and distribution of salaries, complying with Guadeloupe's payroll laws. They are also responsible for drafting compliant employment contracts covering essential aspects like salary, working hours, benefits, and termination terms. The income tax filing season typically commences in April of the following year (e.g., April 2025 for the 2024 tax year). As of February 5, 2025, the exact deadlines and procedures for 2025 declarations are pending updates from official sources.

In Guadeloupe, employee tax deductions follow the French system and primarily consist of income tax and social security contributions.

Income Tax

Income tax is deducted directly from employee salaries based on the progressive tax scale applicable in mainland France. The tax rate increases with income level.

Social Security Contributions

Both employers and employees contribute to the French social security system. Employee contributions are deducted from their gross salary. These contributions fund various social programs, including healthcare, pensions, and family allowances.

• CSG (Contribution Sociale Généralisée): A general social contribution levied on salaries and pensions.
• Other Social Security Contributions: Covering areas like health insurance, retirement, and unemployment.

Additional Deductions

• Professional Expenses: A standard allowance of 10% of taxable employment income (up to a certain limit) is automatically deducted for professional expenses. Employees can choose to deduct actual expenses instead, but this requires documentation and may involve adjustments for reimbursements.
• Supplementary Social Contribution (CSA): This wealth tax applies only to high earners in France.

Tax Rates and Thresholds

Specific tax rates, thresholds, and contribution amounts for social security are subject to annual adjustments by the French government. For the most current information, it's essential to refer to official French government publications or consult a tax professional. As of February 5, 2025, these figures for 2025 are not yet finalized.

Deadlines and Procedures

Employers in Guadeloupe must register with the French tax and social security authorities. They are responsible for deducting employee contributions, remitting them to the appropriate agencies, and filing relevant declarations according to established deadlines. Generally, monthly tax and social security declarations and payments are due by the 15th of the following month. Annual returns are also required.

Retirement Fund Contributions

Employees can deduct contributions made to approved pension, provident, and retirement annuity funds. The deduction is capped at a percentage of their remuneration or taxable income, whichever is higher. Specific limits and regulations should be verified with official sources or a financial advisor.

It is important to note that this information is current as of February 5, 2025, and tax laws and regulations are subject to change. Consulting with a qualified tax advisor is recommended for personalized guidance.

In Guadeloupe, the Value Added Tax (VAT), a consumption tax, is levied on most goods and services.

VAT Rates in Guadeloupe

• Standard Rate: 8.5% (most goods and services)
• Reduced Rates:
  • 5.5% (certain food products)
  • 2.1% (accommodation, transport, catering, housing renovation, basic necessities, equipment/services for the disabled, medicines)
  • 1.75% (miscellaneous, e.g., animals for slaughter)
  • 1.05% (the press)

VAT Registration

There is no specific threshold for VAT registration in Guadeloupe. Businesses operating under the "régime de franchise en base de TVA" (basic VAT exemption scheme) are exempt if their annual turnover is below a certain limit. If the threshold is exceeded, VAT must be charged. It's also possible to opt for VAT registration, even if turnover is below the threshold. Further details on specific thresholds related to the basic VAT exemption scheme can be obtained by consulting French tax regulations, specifically the "Code Général des Impôts."

Filing and Payment

Businesses registered for VAT must file regular returns and remit collected VAT. Those under the normal VAT regime usually file monthly or quarterly, depending on their specific circumstances. The filing deadline is typically the 24th of the month following the reporting period.

Exempt Goods and Services

Certain goods and services are exempt from VAT, including essential items like some food products, medicines and newspapers. Additionally, exports, intra-community transactions, certain financial transactions, and specific services related to international transport, tourism and some agricultural imports are also exempt.

Tax-Free Sales for Cruise Tourists

Guadeloupe offers a tax-free shopping scheme for cruise tourists until December 31, 2026. Approved merchants in designated communes can sell goods exempt from dock dues, VAT, and excise duties to eligible cruise passengers. Tourists can purchase goods from authorized retailers in designated areas and reclaim the VAT. More information on this program, including eligibility and procedures, can be found on the French Customs website. For further information on VAT regulations in Guadeloupe, consult official sources such as the French tax authority website or specialized tax publications. Note: The information here is current as of today's date, February 5, 2025, and might be subject to change.

Guadeloupe, as an overseas department of France, adheres to the French tax system with some specific provisions.

Tax System Overview

Guadeloupe's tax system is primarily governed by French regulations, encompassing income tax, corporate tax, VAT, and local taxes like octroi de mer (dock dues). Individuals and businesses are subject to these taxes, with specific rates and regulations often mirroring those in mainland France. However, certain tax incentives are available to promote economic development in Guadeloupe.

Tax Incentives

While specific details on available tax incentives for 2025 in Guadeloupe are limited in the provided sources, general information suggests that incentives exist and are primarily targeted at boosting specific sectors and fostering economic growth.

• Tax Breaks and Subsidies: The French government offers various programs for businesses in Guadeloupe, encompassing tax breaks and subsidies. These aim to lower operational costs and stimulate investment.
• Sector-Specific Incentives: Certain sectors, like renewable energy and eco-tourism, may be eligible for specific incentives as part of Guadeloupe's sustainable development focus. Information technology and healthcare sectors are also experiencing growth and could be targets for incentivization.
• Investment and R&D Credits: Businesses might benefit from investment incentives and research and development (R&D) credits, aimed at promoting innovation and economic diversification.
• Tax Deductions and Credits: Individuals and businesses may have access to tax deductions and credits to reduce their overall tax liability. Examples include deductions for mortgage interest, charitable donations, and family-related expenses.
• Young Innovative Companies (JEI): Startups designated as JEI could benefit from specific tax advantages, potentially including exemptions from corporate income tax and social charges during their initial years.
• Research Tax Credit (CIR): Businesses engaged in R&D activities can benefit from the CIR, calculated as a percentage of qualifying R&D expenses.

Note: It's crucial to consult official French government resources or a qualified tax advisor in Guadeloupe for detailed and up-to-date information on available tax incentives for 2025. Eligibility criteria, specific benefits, application procedures, and deadlines are subject to change and vary depending on the incentive program. Always verify the most current details before making decisions based on tax incentives.