French Tax Reforms

[Gardian]

In the hairdresser's today, I was having a quick look in the Midi Libre. There was a letter from 'Disgusted of Beziers' (NormanH???) who was commenting on an announcement that (I think) Valls has recently made.

It was along the lines of the intention to move to what we would know as PAYE from 2018.

Fine ............. but the announcement seemed to be suggesting that there would be a 'free year', or did I completely misread it?

With such a change, 2016's declaration would be made in Summer 2017, with assessments and payment following 3 or so months later. Then you kick off PAYE in Jan 2018. Surely they're not proposing that 2017's liability is set aside?

Correct me somebody!

 

[NormanH]

I understood that there will be a double year where one pays the tax liability of the previous year and also start to pay monthly at source...

I haven't got a document to hand so that is just what I gathered from chat and informal discussion on the TV

Of course how this would be managed for those of us with UK sourced income seems unclear...who will take the tax?

[Chancer]

My memory is hazy but something like this happened to self employed tax payments in the early 90's I think, I had a limited company and was also trading as a sole trader and cross invoicing between them (I always was a chancer!) and we put all of the profits for a couple of years through the sole trader business as IIRC 50% of them were written off in the transition, I think they rolled 3 years into 2.

If only France would move to something so simple and centralised as PAYE but their will still be the hundreds of caisses and déductions they are just forcing people to pay up front, well if they are stupid enough to swallow the argument of paying taxes foncières and habitation  twice in one year to go onto monthly payments  then their wont be many "disgusteds of anywheres"

[suein56]

NormanH wrote:

Of course how this would be managed for those of us with UK sourced income seems unclear...

Doesn't it seem likely that we shall have to continue to declare, and be taxed, in the same way as we are now ?

Any French sourced income could start be be taxed at source but UK sourced income would need to be declared by the individual after receipt, as now.

Sue

[NormanH]

"if they are stupid enough to swallow the argument of paying taxes

foncières and habitation  twice in one year to go onto monthly payments 

then their wont be many "disgusteds of anywheres"

I thought this was about income tax, not about property taxes.

[NormanH]

I have now found this:

 Pas question de payer deux fois la même année

La période de transition est, techniquement, le point le plus délicat de

la réforme. "Les ménages ne paieront évidemment pas deux fois l'impôt

sur le revenu en 2018", prévient Michel Sapin.

Pour

éviter que les contribuables paient l'impôt sur les revenus de l'année

précédente et soient prélevés à la source pour les revenus de l'année en

cours en même temps, la bascule ne se fera pas brutalement mais sera

lissée.

► Un lissage sur trois ans pour permettre la transition

La transition se fera petit à petit sur au moins trois ans. Concrètement, précisent LCI et MyTF1news :

⇒ en 2016, 10% de votre impôt sur le revenu sera prélevé à la source. Pour compenser, 10% sera déduit de vos impôts de 2015,

⇒  en 2017, le montant s'élèvera à 25%,

⇒ en 2018, le prélèvement à la source sera pleinement appliqué

Source   http://www.metronews.fr/conso/prelevement-a-la-source-de-l-impot-sur-le-revenu-fiche-de-paie-lissage-annee-blanche-vie-privee-comment-ca-va-se-passer/mofo!ehh95WU22rEk/

[parsnips]

[quote user="suein56"]NormanH wrote:

Of course how this would be managed for those of us with UK sourced income seems unclear...

Doesn't it seem likely that we shall have to continue to declare, and be taxed, in the same way as we are now ?

Any French sourced income could start be be taxed at source but UK sourced income would need to be declared by the individual after receipt, as now.

Sue[/quote]

Hi;

    As the french have no way of accessing UK pension payers then deduction at source is clearly impossible for UK pensioners , so I guess we will continue with the form 2047.

[andyh4]

I am sure that is right Parsnips; after all there will be many sources of income and indeed opportunities for exoneration, that cannot be captured by PAYE - and that for the French not necessarily the British.

Just as with the UK, PAYE does not need to mean an end to a tax form that has to e filled out annually, nor an end to an additional demand for money.

[idun]

For people with exclusive foreign income, surely it'll be like us in the UK. We simply do self assessment, the first year we had to pay up completely and then make payments towards the next bill. Frankly, as it was in France when we got there, to be honest.

I saw mentioned on french news that I believe Iceland, years ago, actually gave a free year and said it worked well, but frankly I cannot see the french government being so 'generous'![Www]