CDHR: what are the implications for cross-border workers?

Introduced under Article 10 of the 2025 Finance Act, the  contribution différentielle sur les hauts revenus (CDHR) is a new tax designed to ensure a minimum 20% tax on 2025 income.

Initially intended as a temporary measure, it is already being considered for renewal next year and could therefore remain in effect longer than initially planned.

The application of the CDHR raises particular questions for cross-border workers residing in France but employed in a neighboring country, especially when their income is generally taxable in the neighboring country rather than in France (as is the case for some Swiss cantons).

The CDHR, an additional contribution, applies when taxable income exceeds certain thresholds. Its calculation is based on the revenu fiscal de référence (RFR), which includes all household income, even if earned abroad and already taxed locally.

If the CDHR is due, it must be paid between December 1 and 15, 2025.
 

How Is the CDHR Calculated ? 

Calculation Basis

In principle, the CDHR is calculated on the total income included in the RFR, including foreign-source salaries.

Even when a tax credit equal to the foreign tax is granted to avoid double taxation, these foreign incomes remain part of the CDHR base (e.g., income from Switzerland).

Only foreign income that is exempt in France under an international tax treaty is excluded from the adjusted RFR.
 

Application Criteria

→ Eligibility Test

Only taxpayers fiscally domiciled in France whose adjusted RFR exceeds certain thresholds are subject to the tax:

• €250,000 for single, widowed, separated, or divorced taxpayers;
• €500,000 for married or PACS taxpayers filing jointly.

→ Mechanism 

The tax authority then performs a comparison:

• 20% of the adjusted reference salary,
• minus the French tax, recalculated as if the tax credit had actually been applied in France.

This method ensures that the tax credit - granted to neutralize double taxation - does not artificially reduce French tax to zero for the purposes of CDHR calculation.
 

When is the CDHR due?

If the difference between these two amounts is positive, it constitutes the CDHR payable.

CDHR: why cross-border workers are concerned ?

Foreign income, even if taxed abroad, is included in the RFR calculation.

While the tax credit neutralizes French tax on these incomes, it is still factored into the comparison to determine if any additional amount is payable.

In practice, for cross-border workers taxed at source in the country of employment, the adjusted French tax is often sufficient to eliminate any potential difference, meaning that in most cases, no CDHR is due.

Particular attention should be given to investment income subject to the flat tax. These incomes increase the RFR but are taxed at a reduced income tax rate of 12.8%, potentially making CDHR applicable.

CDHR: areas requiring caution

The French tax administration has not yet published detailed guidance regarding cross-border workers receiving income taxed in neighboring countries.

The official simulator does not handle complex scenarios properly (foreign income, averaging, cross-border variations).

Taxpayers must therefore calculate CDHR themselves based on estimated 2025 income (noting that some investment income is only known via the annual tax statement provided by financial institutions).

Cross-border salaries are generally included in the CDHR base.

The corresponding tax credit for tax paid in the source country is included in the adjusted French tax.

In most cases, cross-border workers (e.g., in Switzerland) will not be subject to CDHR, but a precise calculation is necessary.

If you would like a full assessment or personalized guidance regarding your situation, RSM France experts are available to assist.

This article was co-written with Augustin de la Chapelle