What Currency Exchange Rate Should I Use For My Tax Return In France?

If you are resident in France, you must, by law, file an annual tax return, and it is mandatory to declare all foreign income—even if you don’t have any French taxes to pay. For example, if you receive a pension from the UK, the US, or any other country, or receive rental income from a property you own outside of France, this must be declared on your French tax return. Investment income, share dividends, international business revenue, or money received from a property sale should also be declared, even if you have already been taxed on this income in the country of origin.

Not only should foreign income be declared on your tax return, but you must also list all overseas bank accounts, cryptocurrency accounts, and life insurance policies on the annex CERFA 3916.

In many instances, tax has already been deducted at source in the country of origin. If there’s a double-tax treaty in place (which there is with all EU countries and most non-EU countries around the world, including the UK, the US, Canada, Australia, and New Zealand), there typically won’t be further taxes owed in France. However, it’s recommended to seek professional tax advice if you are unsure of exactly where and how much your income will be taxed.

As there is no way to declare international currency on your French tax return and there is no official currency converter provided for the purpose of submitting tax returns, this begs the question of which currency exchange rate to use?

The official guidance states that you should use the currency exchange rate on the day that the income was received using the Banque de France rates as a reference point. You can see the currency exchange rate on any given day and also look up past rates here.

In practice, there are two main options used to calculate the euro rate for the purpose of a French tax return:

1. The actual currency rate

The first and arguably most accurate option is to use the actual currency exchange rate at the time of receiving the income. If you received the income directly to your French account or have a standing order set up with a currency exchange specialist (we recommend Moneycorp), then this is simple – you can simply use the amount received in euros.

If your income is kept in a foreign bank account, you could keep a record throughout the year, detailing the amounts received, the corresponding exchange rate, and the amount in euros.

However, in some cases, this may not be feasible, so you may prefer option 2.

2. The average annual currency rate

Another popular method, and the one most often used by French accountants, is to take an average of the exchange rate throughout the year. Accountants calculate this average differently – either by adding up the end-of-month rate for each month and dividing by 12 or by adding the end-of-month rate for December in the year the income was received (e.g. 2024) and the end-of-month rate for December of the previous year (e.g. 2023) and dividing them by 2. The number should be rounded up to the nearest whole percentage.