Taxation: Income Tax, Property Tax in Wallis and Futuna for Expats

Published on May 1, 2026 and written by Cyril Jarnias

Moving to or setting up a structure in Wallis and Futuna means entering one of the most atypical tax regimes within the French territory. No income tax, no wealth tax, no VAT, no CSG… At first glance, it looks like a tax haven. But this absence of local direct taxation does not mean a complete absence of levies, nor does it remove obligations towards mainland France when it comes to real estate or French-source income.

A French territory… but fiscally autonomous

Wallis and Futuna is an overseas collectivity governed by Article 74 of the Constitution. As such, it has complete fiscal autonomy. The authority to create taxes, determine their base and rates belongs exclusively to the Territorial Assembly, based on the statutory law of July 29, 1961 and the decree of July 22, 1957.

This landscape can be summarized by contrasting the local fiscal system with that of mainland France.

Comparative Overview of Major Taxes

This autonomy places Wallis and Futuna in the small club of French collectivities without an income tax – along with Saint-Barthélemy and French Polynesia – while remaining outside French and European lists of “non-cooperative” territories.

Income Tax: The Tax That Doesn’t Exist… Locally

The central point for any expatriate is simple: Wallis and Futuna has not implemented a personal income tax. The territorial tax authority confirmed this via an official statement dated January 23, 2023. Direct consequence: no income tax assessment is issued, and no personalized certificate of tax status regarding income tax can be delivered on site.

For a resident in the territory, wages, pensions, or professional income from local sources therefore do not bear local income tax. However, specific social security contributions exist, and crucially, France continues to tax French-source income according to non-resident rules.

A Local Tax “Black Hole” for Individuals

The Wallis and Futuna regime is characterized by a near-total absence of direct taxation on individuals:

For an employee, the only recurring pressure is from local social security contributions: 6% paid by the employee for pension, 20% for the employer (14% pension, 6% family benefits), paid to the social benefits fund (CPSWF). These contributions are not an income tax, but they determine local social coverage.

When Mainland France Considers You a Non-Resident

For tax purposes, France strictly distinguishes between residents and non-residents. Once your tax domicile is abroad – which includes collectivities with fiscal autonomy like Wallis and Futuna – you are only taxable in France on your French-source income.

This is where the situation becomes complex for expatriates:

In practice, for the year of departure, you must in principle:

– file a standard tax return (form 2042) for the period from January 1st to the departure date, covering your worldwide income while you were a French resident;

– file a 2042-NR tax return for the period after your departure, including only French-source income.

Once settled in Wallis and Futuna, it is the Non-Resident Personal Income Tax Service (SIPNR) in Noisy-le-Grand that manages your file for income tax related to France.

French Tax Scale and Minimum Rate for Non-Residents

Non-residents are taxed in France on their French-source income using the progressive scale, but with a safeguard: a minimum effective rate of 20% on the portion of taxable income below a certain threshold, then 30% above. In other words, even if the mechanical application of the scale would yield a lower average rate, the administration applies at least these 20%/30% rates, unless you demonstrate, by declaring your worldwide income, that your average rate would be lower.

An Emblematic Case: The State Civil Servant in Wallis and Futuna

Mainland French state civil servants assigned to Wallis and Futuna constitute a special case. Their remuneration is significantly increased:

– base salary increased by 105%;

– an isolation allowance representing 9 months of salary for a 2-year contract (equivalent to 42 months paid for 24 months on site);

– family supplements (10% for spouse, 5% per child).

If their main residence is considered to be in Wallis and Futuna, this remuneration is not taxable for French income tax, under the rules specific to public agents abroad. However, they remain liable, as applicable, for taxes in France on other French-source income (rental, financial, etc.) and potentially for the IFI on their real estate assets located in mainland France, if the thresholds are exceeded.

Property Tax: No Local Tax, But a Potential Heavy Bill in Mainland France

Within the territory itself, available texts do not mention any structured property tax like in mainland France. Land management is largely customary, with collective usage and ownership rights that make implementing a classic cadastral tax difficult. This absence is seen as an obstacle to infrastructure project development and entrepreneurial growth.

Conversely, an expatriate settled in Wallis and Futuna who owns property in France remains fully subject to mainland French property tax. And this tax does not disappear when moving abroad.

How Property Tax Works in France for an Expatriate

In mainland France, the Tax on Built Properties (TFPB) is due by the owner, whether resident or non-resident, provided they owned the property on January 1st of the tax year. Whether the property is rented or vacant does not change the principle: the assessment is sent to the owner.

Property tax has several components:

For a non-resident, the calculation rules are strictly the same as for a resident. There is currently no special regime for expatriates settled in a collectivity like Wallis and Futuna. The only practical difference lies in receiving the assessments and making payments, which requires maintaining a reliable postal address or digital access.

Summary Table: What an Expatriate Must Still Pay in France

Exemptions and allowances (for low incomes, the elderly, disabled, etc.) remain, in practice, difficult to claim for a non-resident, whose income is no longer assessed in the same way by the administration.

Real Estate Income in France: Tax Remains Due Despite Absence of Local Income Tax

Even though one pays no income tax in Wallis and Futuna, rental income from properties located in France remains taxable in mainland France. For the French administration, this income is French-source, and having your tax domicile in Wallis and Futuna classifies you as a non-resident.

Unfurnished Rental: Micro-Property or Actual Regime, Even for an Expatriate

For an apartment rented unfurnished in Paris or Bordeaux, two regimes are possible:

– the micro-property regime, if gross annual rents do not exceed €15,000: the administration then applies a flat-rate deduction of 30% for expenses, and you are taxed on 70% of the rents;

– the actual regime, mandatory above €15,000 or by election, which allows deduction of actual expenses (renovations, loan interest, insurance, co-ownership charges, property taxes, etc.).

Furnished Rental: Industrial and Commercial Profits

For furnished rental – whether a student studio or tourist property – the treatment shifts to the category of industrial and commercial profits (BIC):

– micro-BIC regime if annual receipts are below a certain threshold, with a 50% deduction (or 71% for classified tourist furnished rentals);

– actual BIC regime, by election or above the threshold, allowing deduction of expenses and, crucially, depreciation of the building and furnishings.

The result is subject to the same minimum rate mechanism for non-residents. In practice, furnished rental, if well managed, can significantly reduce the taxable base, but does not exempt you from tax.

Social Charges: A Question of Social Security Regime

French-source real estate income is also subject to social charges, in principle at an overall rate of 17.2%. However, for non-residents affiliated with a social security regime of another EEA state or Switzerland, these contributions can be reduced to 7.5%, via a partial exemption from CSG/CRDS.

In the case of Wallis and Futuna, which is not part of the EEA, this reduction does not, as it stands, directly apply. Contributions to the local regime (CPSWF) are not equated with a regime of another Member State, which leaves, in practice, the full burden of French social charges on real estate income.

IFI: Real Estate Wealth Remains Taxable in France

Another sensitive point: the real estate wealth tax (IFI). Residing in Wallis and Futuna does not eliminate the IFI on French real estate assets. If the net value of your real estate assets located in France exceeds €1.3 million on January 1st, you remain liable for this tax, even if your main place of residence is 22,000 kilometers from Paris.

A resident of Wallis and Futuna:

– is not taxed locally on their real estate wealth, due to the lack of a territorial IFI;

– but can be taxed in mainland France on their French properties, like any non-resident, via the 2042-IFI declaration.

Local Land Ownership: Custom, Absence of Cadastre, and Missing Tax

One of the major peculiarities of Wallis and Futuna lies in its land tenure system. Land largely falls under customary law, with collective and family usage rights that do not translate into stable individual titles as in mainland France. This situation makes introducing a classic property tax, based on a cadastral value, very difficult.

Official reports highlight that:

For an expatriate considering buying land or building a house on site, the tax question is therefore paradoxically secondary to the legal question: what property or usage right will be recognized, and according to which customary rules? At this stage, no territorial property tax system structures real estate ownership.

A “Paradise” for Companies Without Local Activity

Beyond individuals, Wallis and Futuna also attracts attention for its rules aimed at companies, especially those without local activity. Again, the logic is radically different from that of mainland France.

There is no corporate tax in the classical sense, nor VAT. Instead, the territory has implemented flat-rate contributions and business license taxes.

The Business License for Companies with Local Activity

Any individual or legal entity conducting, for their own account and for profit, an activity whose headquarters is established in Wallis and Futuna must pay a business license tax. It includes:

– an annual fixed fee, varying according to the nature of the activity, between approximately €84 and €7,542;

– a specific additional fee for alcohol trade, between €126 and €838;

– an additional 30% tax for the benefit of the Chamber of Commerce (CCIMA), calculated on the main license amount.

We are therefore dealing with a professional capitation tax, rather than a tax proportional to profits. Whether the company makes or loses money, the business license is due.

Tax characteristic

Alongside this license, companies face heavy indirect taxation on professional imports: about 32% of the goods’ value (20% entry tax, 10% customs duties, 2% proportional duty). For a local business, industry, or trade, it’s this item, more than profit tax, that weighs on profitability.

Tax on Companies Without Activity in Wallis and Futuna

The most emblematic scheme for expatriate investors or holding structures is the “Tax on companies without activity in Wallis and Futuna”. It targets companies that have a legal link with the territory (registration, headquarters…) but conduct no actual activity there.

This tax is: the generalized social contribution.

The amount is therefore known in advance and does not vary with the economic health of the structure. It is this character, completely disconnected from results, that explains why Wallis and Futuna has sometimes been described as a destination for Pacific mailbox companies, even though the territory is not on French or European blacklists.

Numerical Example: A Holding Company Registered Onsite Without Local Activity

For an international group seeking to optimize its tax on dividends or capital gains, the absence of corporate tax and local withholding on distributions is obviously attractive. But these structures remain exposed to anti-abuse rules in the jurisdictions where activities and shareholders are actually located.

Imports, Customs, and Implications for Expatriates

If local income tax is zero, the cost of living is not. Wallis and Futuna relies heavily on imports for food, construction materials, energy. And these flows constitute the main base of the territory’s taxation.

Goods imported for professional use are heavily taxed, with a cumulative total of:

– entry tax (on average around 20% of the value);

– customs duties (about 10%);

– proportional duty (2%).

When transferring residence to the territory, personal movable property may benefit from duty-free admission, under certain conditions (proven prior ownership and use, no resale for 12 months, etc.). Vehicles (cars, motorcycles, boats, airplanes) are, however, excluded from this exemption.

Tax Residence: Wallis and Futuna Viewed from Paris

For the French administration, Wallis and Futuna is part of the collectivities with “fiscal autonomy”, equated with foreign states for tax purposes. Concretely:

This classification has significant effects in case of a return to France. In the year of return, the taxpayer must again split their declaration: French and foreign income before the return date (under non-resident status), then worldwide income after the return (under resident status).

What This Changes for Income Tax

For an expatriate who spent several years in Wallis and Futuna without paying local tax, a return to mainland France comes with a complete shift:

For an investor who built wealth from locally untaxed income, the tax shock can be significant upon returning to France.

Double Taxation: A Gray Area Due to Lack of Treaty

Another decisive element: unlike French Polynesia, which benefits from an administrative assistance agreement with the State and an old treaty on investment income, Wallis and Futuna has no bilateral convention with France to avoid double taxation.

In theory, this means that Wallis and Futuna source income could be taxed in France if the taxpayer becomes a resident again, without an explicit treaty mechanism for tax credit. In practice, the absence of local income tax mitigates the risk of economic double taxation, but leaves open the question of qualifying foreign income and its integration into the calculation of the French effective rate.

– exemption with consideration for the effective rate: foreign income is not taxed in France but is used to determine the average rate applicable to taxable income in France;

– tax credit: France taxes the income but grants a credit equal either to the foreign tax or to the corresponding French tax, to neutralize double taxation.

In the absence of specific provisions, it is domestic law that applies and can result in full taxation in France of past income earned in Wallis and Futuna, if the taxpayer becomes a French resident again. Therefore, caution and specialized advice are essential before any change of status.

Between Tax Attractiveness and Low Standard of Living

Economic data puts this regime in context. Wallis and Futuna ranks among the poorest territories of the French Republic in terms of GDP per capita, at about €10,000 annually, far from the mainland average. Compulsory levies represent about 16% of GDP, compared to over 40% in mainland France, and finance only one-fifth of public expenditures. The French state covers nearly three-quarters of the local budget.

For an expatriate, the tax attractiveness (zero local income tax, moderate social charges, absence of VAT) is tempered by:

– a high cost of living due to heavily taxed imports;

– a limited job market, heavily dependent on the public sector;

– an undiversified economy, where productive investment remains constrained by customary land tenure.

Key Takeaways If You Are an Expatriate in Wallis and Futuna

To conclude, several key points are essential when discussing taxation – income tax and property tax – in Wallis and Futuna for expatriates:

This territory therefore functions as a very unique fiscal enclave within the Republic, where the near absence of local income tax and property tax must never make one forget that mainland France continues to tax, without special consideration, everything that remains anchored in its own soil: rents, capital gains, real estate wealth. For an expatriate, the key lies in anticipation: mapping out income and assets by geographic source, organizing departure, possible return, and avoiding confusing the absence of local tax with the pure and simple disappearance of all tax obligations.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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