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Impot sur le revenu, Acompte provisionnel 2006


Ron Avery
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I thought I understood the French income tax system, but how wrong can one be[:O].

 I have just received the above form, it is asking me if I want to pay my tax bill monthly or tri-monthly, and advises of all the ways that payment can be done, so far so good.  It is then demanding a third of LAST year's tax bill be paid by the end of February. I paid my 2004 tax bill in full in September 2005.

 Is this the new system Miki and others wrote about where your tax is estimated for the year, if so fine, I can understand that ,but why am I being asked to pay now and not in September as I did last year and to pay a third even before the normal forms have been sent out?

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No that is quite right RA.

I had written about all these complexities before, I described as best I could as to how this works, although sadly I am not very good at explaining things sometimes. It was on a post I remember you responding to too, although you did not as far as I can remember respond  to what could have looked like ramblings on my part, but in fact were not and were rather important.

If you don't sign up for a monthly bill, then you will always start paying towards this years bill at the end of February.

As they don't know how much the bill for 2005 is going to be they base their demand on the tax due  for 2004,  it is always based on what we declared the previous year. We then have to pay a third of the equivilant of last years bill by then end of February. Can't remember when the next third is paid, probably about May or June and then the balance is paid or reimbursed in late summer.

 

Example  last years tax bill for 2004 was 3000euros.

If you paid by prelevement there would be 10x 300 payments due and you would have started your first payment in January 06.

Or you would have to pay 900 euros by the end of February.

 

Re the prelevements, if when you work out your tax due for 2005 and there is going to be a 10% difference in the amount due then one can write to the tax office asking them to increase or decrease the prelevement. I have done this in the past although it has always been to increase it. If one does nothing  and there is money due, they usually debit this in November and December.

 

If you don't understand I'll try to explain again.

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Thanks TU, not sure what I got wrong, but it is not important, I did not sign up for monthly or tri monthly payments to my knowledge, so can I ignore this demand and just pay the tax bill in September as I did last year?  This seems an oddity for the French getting tax money paid up front.

What threw me about this is the form is headed Revenus 2005, unless you read the small print it appears to be a demand for last years tax bill again [:O]As far as I can now find out, the next instalment is in June and then there is a balancing payment based on the actual 2005 bill in September

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[quote user="Ron Avery"]

Thanks TU, not sure what I got wrong, but it is not important, I did not sign up for monthly or tri monthly payments to my knowledge, so can I ignore this demand and just pay the tax bill in September as I did last year?  This seems an oddity for the French getting tax money paid up front.

What threw me about this is the form is headed Revenus 2005, unless you read the small print it appears to be a demand for last years tax bill again [:O]As far as I can now find out, the next instalment is in June and then there is a balancing payment based on the actual 2005 bill in September

[/quote]

You have to pay this, and your only choice is monthly or three monthly, if you believe your tax bill this year will be substantially lower than last years you can reduce the payment by upto two thirds, however they only allow a 10% discrepancy on the final tax bill so you should overestimate to be on the safe side. I suppose it's the closest thing you get to the UK paye system.

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As Les Lauriers says, you have no choice, they want their money. It isn't really up front as it is partial payment due on the money owed for 2005's revenue. So your choice start a prelevement or pay up a third at the end of February.

If you ignore this bill they will send it again with a percentage penalty payment on it.

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Do be careful if you decide to ask for a reduction as you think your liability is less than previously. According to our accountant, if you under-estimate what you think you owe, you will be charged pretty hefty interest on the difference between what you estimate and what you actually owe. This applies to all sorts of other charges, besides tax. Unfortunately it doesn't work the other way round.
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[quote user="Will the Conqueror"]Do be careful if you decide to ask for a reduction as you think your liability is less than previously. According to our accountant, if you under-estimate what you think you owe, you will be charged pretty hefty interest on the difference between what you estimate and what you actually owe. This applies to all sorts of other charges, besides tax. Unfortunately it doesn't work the other way round.[/quote]

What if, although you don't know how much it will be, you do know your tax liability is going to be substantially more than it was in the previous year?  Are you supposed to pay more than they ask for?  If you didn't would penalty interest be added later?

I used to think french  income tax was fairly simple.  Now I think it's about as simple as french grammar.

Patrick

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We are supposed to change the prelevement if it is going to be over 10% more, I think. I admit I forgot to send the change in one year and they just took the extra off in Novemeber and December.

 I don't know how much more they would consider as trying to do them out of money early really and take action.

 AND I don't know how it would be for those who pay every three months either. I would have hoped that that would be indicated on the back of the bill it arrives, if it isn't I don't think I would worry about it.

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