French tax changing to a sort of PAYE in 2018

[NormanH]

This has been discussed for a while, but it was finally passed on Thursday.

From 2018 income tax will be paid monthly rather like PAYE.

The change over will be as follows:

In 2017 one declares one's income around May  for 2016 as at present, and pay it again as at present around September.

In 2018 one will start paying tax based on the 2017-for-2016 declaration, but on a monthly basis of a 12th per month

One then declares 2017 income in May as before but continue to pay the same monthly sum until September, when the monthly amount is re-calculated to take account of the May declaration

http://droit-finances.commentcamarche.net/faq/53290-prelevement-a-la-source-calendrier-de-l-impot-2017-2018

What is not clear to me is how those of us with monthly income from the UK or other countries  will be assessed, because for the French the tax will be taken directly by the employer or by the Pension provider as in the UK

Octobre 2017 : le taux est transmis à l'organisme qui sera chargé de le prélever (employeur, caisse de retraite...).

 HOW this will be done for those with UK pensions and by whom I am not yet sure

[woolybanana]

The leading Republican candidates seem to have sworn to get rid of it, but if they see it reduces the number of fonctionnaires, I reckon they will keep it.

Yes, Norman, I am not sure how we will be assessed either, perhaps simply choose a figure based on our last return, say one twelth?

[Chancer]

Great news!

 

Conséquence : le flux des paiements ne serait pas interrompu, les contribuables payant chaque année un impôt, mais les revenus de 2017, en tant qu' « année blanche », devraient en pratique être exonérés d'impôt

 

I already benefitted from a similar changover on self employed charges in the UK, I was able to do some creative accounting between my LTD company and self employed earnings to put all the profits into the self employment during the "Free year" there will be scope for some to do the same here in France.

 

Happy days!

[idun]

I am wondering how it will affect us, and what international tax agreements there are, as in theory, we no longer pay income tax in France.

We paid retenu a la source for several years, so have done that already, in spite of many, including me, prior to it happening, did not know it existed. AND for non residents, retenu a la source, non resident, is a lot higher tax than for residents to boot.

I think that I need to get onto HMRC, and discuss it with them, as there is one thing for sure, if we pay there, we won't be paying where we live, and maybe HMRC, would prefer to have our income tax, than the french, but one never knows these days nez pah!

[andyh4]

Norman wrote:

HOW this will be done for those with UK pensions and by whom I am not yet sure

With my last tax demand, I received paperwork to allow me to pay monthly. With it were a set of new rules showing that monthly contributions would become compulsory if your tax, or taxable income (cannot remember which now) was above a set level. That level would fall for the following year. So I am guessing that it will become more or less compulsory in the next few years. Payment can be by prelevement or through billing (I assume you have to remember to send of the cheque each month and woe betide you if you forget.)

[nomoss]

A similar system was in operation in Spain when I was there.

The payments were made each month into the gov't account via any bank, usually one where one has an account.

There was a duplicated form for this, completed with details of the payer and the amount, onto which the bank's machine printed proof of payment; the payer retained one copy.

The total of these "fractional" payments was entered on one's annual return, and deducted from the calculated actual tax due.  Any overpayment was reimbursed within quite a short time.

The proofs of payment had to be kept by the taxpayer for a mandatory period, I think 5 years.

[NormanH]

But who calculates and takes the payments?  Under the new system for French people they will be taken  at source  in France either by the employer or the pension provider, of whom there are several, but the UK agencies paying them won't do this.

I suppose it could just be a twelfth of the tax liability for 2016 each month until the September adjustment kicks in.

[andyh4]

That is exactly how it will work for me Norman.

I have to say though that I am less sure of the mechanics for someone with a mix of French and foreign pensions. I assume the French caisse will take based on what they pay, and there will be a monthly bill based on the difference between that and your last tax bill.

[nomoss]

[quote user="NormanH"]But who calculates and takes

the payments?  Under the new system for French people they will be

taken  at source  in France either by the employer or the pension

provider, of whom there are several, but the UK agencies paying them won't do

this.

I suppose it could just be a twelfth of the tax liability for 2016 each month

until the September adjustment kicks in.

[/quote]

Sorry, I edited my post to make it brief, I should have left more details.

The completed forms, showing income, deductions, and provisional tax due were

given us by our accountant each month. I don't know if this was a legal

requirement, or whether we could have obtained and completed the forms

ourselves, as the deductions and tax were according to published and available

rates, and not difficult to calculate. As far as I rememeber, the provisional tax was about 10%.

Payments were made by us by transfer into a government account via our own

bank, but could be paid directly, in cash, into one of the banks nominated by

the gov't. The Spanish gov't didn't/don't take cheques for anything. You pay

cash when due or by direct debit.

The payments were not made in response to a demand from the taxman, but raised

by, and as a responsibility of, self employed persons and employers, to provide

an official record of earnings and deductions (verification printed on the form

by the bank's machine), in the same way that one is responsible to make a

declaration for tax every year.

I'm talking about Spain 17 years ago, so it is probable that by now these

payments are made on line.

In France, in a similar way, fractional payments of provisional tax on regular

foreign income, at published rates, could be made by identified payments into a

government account, the "paying in" forms being available physically

or on line, as other forms are at present. Or even paid directly on line.

But maybe that would be too simple for France?

[NormanH]

I see, with the re-evaluation kicking in in September.