When moving to or living in France, it's essential to understand all potential financial obligations, including the Cotisation Subsidiaire Maladie, the CSM tax. This tax, which support the French healthcare system, is separate from income tax and is billed annually by URSSAF. Here is a complete guide for expats navigating this unique charge.
What is the CSM tax?
The Cotisation Subsidiaire Maladie (CSM) is a healthcare contribution in France, not a traditional income tax. This charge applies to individuals who are part of the French public healthcare system but do not pay social charges through employment or other qualifying income streams. The CSM ensures that everyone contributes fairly to the healthcare system, particularly those whose income derives primarily from capital or investments.
It's important to note that the CSM is collected by URSSAF, typically billed in November each year. This tax ensures that even those without traditional employment income contribute to the system they benefit from, maintaining equity across taxpayers.
Who is liable for the CSM tax?
You may be subject to the CSM tax if you meet the following criteria:
- Low employment income: Your household income must exceed 20% of the annual Plafond de la Sécurité Sociale (PASS), set at 9,420 € for 2025, to avoid the CSM tax. If your income from self-employed or employed work is less than this threshold, the tax is applied to your household income. However, once your income surpasses 20% of the PASS, you are no longer subject to the CSM tax. Example: Earning more than 9,420 € from employment or self-employment in 2025 exempts you from the CSM tax.
- Significant asset income: Your net income from assets, such as rental properties or investments, must exceed 50% of the PASS (23,550 € in 2025). Only the portion exceeding this threshold is subject to the 6.5% CSM tax. Example: If you earn 30,000 € in asset income, only 6,450 € (30,000 €-23,550 €) is taxed, resulting in 419.25 € in CSM tax.
- No social benefits: If you do receive French retirement pensions, French invalidity benefits or French employment allowances, the CSM tax doesn't apply. Foreign pensions or social benefits do not automatically exempt you, and the CSM may still apply in such cases.
How much is the CSM tax?
The Cotisation Subsidiaire Maladie (CSM) tax in France is calculated at 6.5% of net capital and investment income declared in the previous year, with a 50% abatement of the PASS. For 2025, this deduction is 23,550 €. If your total income exceeds 0.5 times the PASS, 47,100 € in 2025, you may need to pay the CSM.
For example, a single person earning 50,000 € could calculate their tax as:
50,000 € – 23,550 €= 26,540 € x 6.5%= 1,719,25 €
Now, for a couple with a combined income of 50,000 €, the calculation is a bit different:
50,000 € – (23,550 € x 2) = 2,900 € x 6.5% = 188,50 €
Some income such as state pensions from EU or UK may be exempt from the CSM. Additionally, households with children often qualify for extra allowances, potentially eliminating liability altogether.
Key considerations for expats
- It is not part of income tax: The CSM tax is billed separately each November and is not included in your annual income tax declaration.
- For asset-heavy households: Foreigners living in France with significant income coming from rental properties or investments, but with minimal wage income are more likely to be affected.
- Planning ahead is important: Being aware of this charge can help you budget for additional financial obligations in France.
To wrap it all up
For expats in France, staying informed about taxes like the CSM ensures no surprises in your financial planning. Book your consultation with Fab Expat today and get the guidance you need for a smooth transition to life in France.
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