Taxation (continued): Withholding tax in France from January 2019

Taxation (continued): Withholding tax in France from January 2019

In the previous Message (No. 63-2018) we raised the issue of changes to be made from January 2019 for residents in France who are liable to income tax. Over the summer there were concerns about the state’s technical ability to implement the proposed reform, but a final decision has now been made that it will in fact be implemented correctly.

For employees, tax will be deducted at source by the employer who already pays the many employer and employee social security contributions, and who will now also have the new obligation to retain the tax that the employee owes to the Tax Authorities. But since retirees no longer have an employer, their tax will be directly deducted from their bank account. This should not significantly change the prevailing practice for the majority of retired taxpayers who have already opted for a monthly payment system. The deduction will be made over 12 months and cash payments will be prohibited above an annual tax of 300 euros.

The amount of the tax that will be levied monthly is shown on the tax notice which should have been received at the end of the summer of 2018 and payments will begin in January 2019. However, this does not change the obligation to make the annual tax declaration in spring 2019. Taxpayers will continue to receive their pre-filled declaration by mail or will be able to consult it on their personal space which they may access on the Ministry’s website (http://www.impots.gouv.fr). By the end of the summer at the latest, or very quickly for those who make the declaration by Internet, taxpayers will know the amount of the effective tax for 2019 and the projected tax for 2020. The Tax Authorities will make a refund if too much has been paid or if requested to repay the balance. The Tax Authorities are encouraging taxpayers to create their personal space on the internet to do the entire administrative process: declaration, payments, possible changes, etc. But the paper declaration remains possible even if the goal is to have zero paper.

We advise you to read the information sheet attached to your tax notice which you should have received at the end of the summer of 2018 and which gives detailed information on the questions that you may have on this subject. A manager from the Bellegarde sur Valserine Tax Authorities will speak at the ILO Pre-retirement Seminar, Tuesday 13 to Friday November 16 2018, during a session focusing on taxation in France. Please also be aware that it is always possible to contact the Tax Authorities for your own area for additional information on your particular situation.