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Tax calculator if you use box TI


JohnRoss

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I would be most grateful if anyone who receives a service pension, police, teachers pension or any govt pension that is only taxed in the UK could look at their Avis d'impot for the last tax year i.e. 2007. Does the line Retenue de la source ou impôt payé un l'etranger  or words to that effect followed by the figure for the tax paid in the UK appear? I am assuming that the net govt pension had been declared in TI and the section relating to that on 2047 showed the tax paid. On mine for 2007 I cannot see that line of text and am not sure if this signals an error on their part. Do they get the amount of UK tax paid from the 2047 as there seems to be nowhere on the 2042 to indicate this. 

I tried using the on-line calculator for 2007 and after some experimentation found  the following: If I added my UK govt pension to the contents of box AS on 2042 and ran the calculator, having filled in other boxes as necessary, and then subtracted the tax paid in the UK from the tax to be paid figure the results came out close to what the Avis indicated. The Revenu fiscal de référence also came out close to that indicated on the Avis. If you have tried using the on-line calculator you will have found that it gets all upset if you try to put anything in box TI and gives a too difficult message. Now box TI should contain the net figure for the govt pension and not the gross if the formula re the entry in section VII col 4 minus col5 is correct which in itself seems a bit strange as this would mean that the tax band is calculated using in part net and not gross pension although other sums in AS like old age pension or other previous employment would be in fact gross. I am sure that I am not the only one to find this annual hassle somewhat disturbing!...................................JR

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[quote user="JohnRoss"]

I would be most grateful if anyone who receives a service pension, police, teachers pension or any govt pension that is only taxed in the UK could look at their Avis d'impot for the last tax year i.e. 2007. Does the line Retenue de la source ou impôt payé un l'etranger  or words to that effect followed by the figure for the tax paid in the UK appear? I am assuming that the net govt pension had been declared in TI and the section relating to that on 2047 showed the tax paid. On mine for 2007 I cannot see that line of text and am not sure if this signals an error on their part. Do they get the amount of UK tax paid from the 2047 as there seems to be nowhere on the 2042 to indicate this. 

I tried using the on-line calculator for 2007 and after some experimentation found  the following: If I added my UK govt pension to the contents of box AS on 2042 and ran the calculator, having filled in other boxes as necessary, and then subtracted the tax paid in the UK from the tax to be paid figure the results came out close to what the Avis indicated. The Revenu fiscal de référence also came out close to that indicated on the Avis. If you have tried using the on-line calculator you will have found that it gets all upset if you try to put anything in box TI and gives a too difficult message. Now box TI should contain the net figure for the govt pension and not the gross if the formula re the entry in section VII col 4 minus col5 is correct which in itself seems a bit strange as this would mean that the tax band is calculated using in part net and not gross pension although other sums in AS like old age pension or other previous employment would be in fact gross. I am sure that I am not the only one to find this annual hassle somewhat disturbing!...................................JR

[/quote]

Hi,

     Yes I receive a govt. pension taxed in the UK. You will not find an entry for "impot payé à l'étranger" in respect of your govt pension because, as you say, you deduct tax paid in the UK on the 2047 and transfer the net. As this is not taxed in France , only taken into account to calculate the tax rate, there is no need to show the UK tax on the "avis".Pensions entered in AS are taxable in France and are therefore entered gross.Just to confuse you further, up until about 8 yrs ago there was no provision on 2047 to deduct the UK tax paid on govt pensions  and the gross was "taken into account", this was changed after it was claimed that this meant some of the pension was taxed twice.

    You may see on your or another's "avis", an entry for "impot payé à l'étranger", but this refers to income (like dividends) which are taxable in France, but which you receive net of UK tax, for which credit is given against your french tax bill.

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Well thanks for that but there is something weird going on here. If I run my declaration for 2007 through the on-line calculator without building in the teachers pension I get a tax payable figure which is much lower than what I was asked to pay last year. I will do it again and try and calculate the tax band I would have been in if the teachers pension was taken into account and modify the result given. Will come back on this and thanks. Have the tax bands for 2008 changed compared with 2007 at all?.................................JR
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[quote user="parsnips"]...up until about 8 yrs ago there was no provision on 2047 to deduct the UK tax paid on govt pensions  and the gross was "taken into account", this was changed after it was claimed that this meant some of the pension was taxed twice.[/quote]I'm very much interested in this.  I think there's a conflict between different official instructions on whether the amount to be included in the rate calculation is the gross or the net.  My interpretation is that it should be the gross, but whether I'm right or wrong, the fact is that for at least the last 2 years my RFR has been calculated on the gross amount of income taxed in another country.

It may have been done like that in earlier years also, but in earlier years the effect wasn't important enough to make me sit down and try to reconstruct the RFR computation.  For reasons I needn't bore you with, it's quite important now.

I have written to the local inspector explaining my doubt and asking for confirmation, one way or the other.  I'll be very happy to be declared wrong, because it will save me money in the future and will also give me a reason to make a repayment claim, if such a thing is possible in France.  (It ought to be, if the reason is an error in the computation rather than an error in my declaration.)  

By the way, I haven't had a reply to my letter yet, but it's only about a month since I sent it, and it's a busy time of year in the tax office.

Sorry for the long build-up.  If there was an identifiable change in practice that I can refer to, it would obviously be useful.  Can you possibly give me a lead to it?
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Hi,

      I have found some of my old declarations which will shed some light on this. I need some time to sort them out , but will come back later.

OK, this is going to be a bit long-winded but here goes:(I have cut out unnecessary verbiage)

 The 2047 for 2001 income, at VII, had col 4,montant brut ....col 5,  impot acqitté à l'étranger...col 6, montant des charges............total each col . BUT there was no provision on the form(as there now is )to total tax and charges and subtract from gross income to give a net figure , instead , the notice sec21, said "inscrivez dans ce tableau(VII),les revenus réalisés hors de France, et bien que non-imposable en France ,doivent néanmoins étre pris en compte pour calculer le taux d'imposition de vos autres revenus imposables en France (règle du taux effectif) Il s'agit de revenus exonéreés en virtu:....... des conventions internationales.

.........reporter le total de la colonne 4 du VII à la ligne TI de 2042 NE DEDUISEZ PAS LES SOMMES INSCRITES DANS LES COLONNES 5 &6 ; LA DEDUCTION SERA EFFECTUEE PAR LE SERVICE DES IMPOTS. (my caps)-----in my case at least this was never done , but I only checked it after the change which came in the 2047 for 2002which (as today) had at VII col 4...montant brut, col 5 impots acqittéà l'étranger , et col 6, charges....then a total of each col, but then ,as now, a grid to total each col and then a line labelled --Total à reporter ligne 8 TI de 2042(total col 4 -(total col 5 + total col 6)).

 The notes (I quote 2004--can't find 2002)  notice sec 15  said-inscrivez dans ce tableau (VII) les revenus realisés etc (as above)............reportez le total de la col 4 du VII à la ligne 8TI de 2042,LES IMPOTS ET CHARGES AFFERENTS A CES REVENUS SONT PRIS EN COMPTE POUR LE CALCUL DU TAUX EFFECTIF C'EST POURQUOI LES REVENUS A REPORTER SUR LE 2042 DOIVENT ETRE NET DE CHARGES ET D'IMPOT PAYE A L'ETRANGER.(my caps)

When I then checked previous years I found that the net figure had not (as specified on the old notices )been  calculated by the tax office.

I applied for a recalculation of the previous 3 years , but received a reply(since lost), saying that the new system was only put into effect by a 2003 instruction. Although this was obviously wrong, I regret to say that as my tax bill was small I couldn't be bothered to pursue the matter.

I hope this helps--it does indicate that it is the NET figure which should be used to calculate the taux effectif. 

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Ok well this is what I did this am. Looking at my Avis d'impôt for 2007 2nd page Detail des Revenues and saw the amounts declared for our employment pensions. 10% had been deducted, not sure why but the better half turned 60 during that year, I was not yet 65 but am now. These two had then been added together. So far so good! The amount of Revenu de capitaux mobilliers I had declared, Building Soc interest, premium bond prizes etc had then been added. Then the CSG figure from the previous year had been deducted, again so far so good and listed as Revenu Imposable!

Now this is where it goes a bit odd. Along side Taux effective (Revenu Mondial) appears a figure which is the Revenu Imposable figure plus my Teachers pension net minus 10%.

I am not sure why pensions have been reduced by 10%, not that I am complaining.

I take this figure and divide it by 2, there are two of us in this declaration. I now subtract the top of the first tax band.

Net Income Subject to Tax Up to €5,687 Band €5,687 Tax Rate Nil
Net Income Subject to Tax €5,688 to €11,344 Band €5,657 Tax Rate 5.5% Tax on Band€311 Cumulative Tax €311
Net Income Subject to Tax €11,345 to €25,195 Band €13,851 Tax Rate14% Tax on Band €1,939 Cumulative Tax €2,250
Net Income Subject to Tax €25,196 to €67,546 Band€42,351 Tax Rate30% Tax on Band €12,705 Cumulative Tax€14,955
Net Income Subject to Tax Over €67,546 Tax Rate 40%   (Don't know what cumulative tax is)

and get a figure which gives me a 5.5% band and I calculate 5.5% of this figure. I then double the result, there are two of us and get a figure which is a bit more than what they have said under Impot apres application du taux effective. Now strangely enough this difference is equal to 10% of the tax I paid in the UK, coincidence? They then subtracted 20 euros for doing it on-line for the first time and a small amount for a gift to charity and gave me a final tax figure which I paid.

Now I cannot see where they have allowed me my teachers pension without taxing it or rather taxing 90% of my net teachers pension. This surely cannot be right!!!!..................................JR

PS all comments on where Sir is being a pratt would be appreciated! If I don't sort this now they may cock it up again this year, or one of us might!  

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Hi,

      The 10% reduction is a standard reduction which everybody gets from salaries and/or pensions, it is supposed ,in the case of salaries ,to cover normal everyday expenses--I don't know what it is supposed to cover for pensioners, probably just carried over from when they worked, so they don't suffer a disadvantage on retirement.

       Your teacher's pension is only used in a calculation to find your correct rate of tax. In a simple form, it consists of adding up all your income ,that which is taxable here + your teachers pension (which is not taxable here) ......working out what overall percentage rate would apply IF all your income were taxed here ; then applying that % rate to just your french taxable income.Your teachers pension is NEVER taxed here.The calculated rate will almost certainly not equate exactly to the tax band rates, I have not used any of the calculators you mentioned, but I suspect that they cannot take account of this "notional" rate calculation, which is based on  the so-called TAUX EFFECTIF(REVENU MONDIAL) which is mentioned somewhere on the "avis", the figure on the avis is not itself the TAUX EFFECTIF it is the notional income from which the TAUX or RATE is calculated.  

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Ok and I used the following information and worked it through again and it came out the same as they charged me so I guess they were right. http://www.annett-consultancy.com/article_filling_in_your_French_tax_form.html#UKpenions

The system seems to work as follows: Take the sum of boxes AS and BS, less 10% in both cases. Add to this Box TS and box TR, if filled,  and subtract figure given against CSG for last year. Add, this is the weird bit, UK govt pension net minus 10% which gives Revenu fiscal de reference. Now divide this by two, if there are two of you, and use tax bands to calculate tax for 1 part.  Multiply this figure by 2, if two of you, and then multiply this figure by the fraction Amount taxable in France / World wide income.  Now subtract something called a decote, very small just a few euros, don't know what this is and a certain fraction of charitable gifts etc if applicable. I assume this is where half the cost of our new stove would also be subtracted. What you have now is the tax you will pay. I have calculated the tax for 2008 and it will be interesting to see how close it comes! Phew glad that is over for another year unless you know something different!..................JR

 

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[quote user="JohnRoss"]

Ok and I used the following information and worked it through again and it came out the same as they charged me so I guess they were right. http://www.annett-consultancy.com/article_filling_in_your_French_tax_form.html#UKpenions

The system seems to work as follows: Take the sum of boxes AS and BS, less 10% in both cases. Add to this Box TS and box TR, if filled,  and subtract figure given against CSG for last year. Add, this is the weird bit, UK govt pension net minus 10% which gives Revenu fiscal de reference. Now divide this by two, if there are two of you, and use tax bands to calculate tax for 1 part.  Multiply this figure by 2, if two of you, and then multiply this figure by the fraction Amount taxable in France / World wide income.  Now subtract something called a decote, very small just a few euros, don't know what this is and a certain fraction of charitable gifts etc if applicable. I assume this is where half the cost of our new stove would also be subtracted. What you have now is the tax you will pay. I have calculated the tax for 2008 and it will be interesting to see how close it comes! Phew glad that is over for another year unless you know something different!..................JR

 

[/quote]

Hi,

    The decote is a device for taking those who pay little tax out of tax or lowering their bill . The figures change a bit each year , this year if your calculated tax is less tha 862€ they subtract 1/2 the tax figure from 431€ and the result is deducted from the tax due. If the resulting tax due is less than the "seuil de mise en recouvrement" (this year61€) it is not collected.

The portion of charitable gifts deducted from tax due, is 66%---very generous. But you must give to a french organisation (or the french branch of an international one)which issues a"Reçu Fiscal".

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Hi and thanks and that makes sense having worked through the figures again. The Annett-Consultancy document lists crossing box TT for new policies taken out in the tax year in question so I am not sure if this implies crossing it for existing policies. I don't know if you have had the time to read the document but would be interested in your opinion as to how accurate it is. It seems to have been updated for year 2008..............................................JR
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  • 1 month later...

Just a thank you to JR and Parsnips for this thread.

Finally decided that I couldn't put off doing my 2008 return any longer (yes, I know it's late and yes, I know that they'll fine me, but ......).

Anyway, found a shady spot and sat down to wade through all this stuff: had never been able to work out how they arrived at the numbers they did, given OH's UK govt pension. The above explanation & the Impot sort-of logic now makes sense and I was able to construct a spreadsheet which will work for future years, with obvious future earnings & allowance adjustments.

Crucially, I find that our liability is significantly less for 2008 than 2007 (exchange rate + improved allowances), so a happy Gardian!!  Oh, and the fine for a late return won't buy anybody a decent lunch, so tant pis.  

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[quote user="JohnRoss"]Hi and thanks and that makes sense having worked through the figures again. The Annett-Consultancy document lists crossing box TT for new policies taken out in the tax year in question so I am not sure if this implies crossing it for existing policies. I don't know if you have had the time to read the document but would be interested in your opinion as to how accurate it is. It seems to have been updated for year 2008..............................................JR[/quote]

Hi,

     I've just had a look at the Annett site and while generally useful it makes the same rather senseless suggestion as the "Connexion" guide that people with E121 put their pensions in 2047 VIII (income subject to CRDS) and then write a note to say it "is NOT subject to CRDS! Why not just not enter it?

     Also they do not mention the facility to claim an allowance for cotisations to the CMU in "deductions diverses" box DD on 2042, which has now been confirmed to me by a "Conciliteur Fiscal".

   I did get the impression that it was written by the same people as the "Connexion guide".

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[quote user="JohnRoss"]Hi and thanks and that makes sense having worked through the figures again. The Annett-Consultancy document lists crossing box TT for new policies taken out in the tax year in question so I am not sure if this implies crossing it for existing policies. I don't know if you have had the time to read the document but would be interested in your opinion as to how accurate it is. It seems to have been updated for year 2008..............................................JR[/quote]

Hi,

     I've just had a look at the Annett site and while generally useful it makes the same rather senseless suggestion as the "Connexion" guide that people with E121 put their pensions in 2047 VIII (income subject to CRDS) and then write a note to say it "is NOT subject to CRDS! Why not just not enter it?

     Also they do not mention the facility to claim an allowance for cotisations to the CMU in "deductions diverses" box DD on 2042, which has now been confirmed to me by a "Conciliteur Fiscal".

   I did get the impression that it was written by the same people as the "Connexion guide".

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[quote user="parsnips"]

     Also they do not mention the facility to claim an allowance for cotisations to the CMU in "deductions diverses" box DD on 2042, which has now been confirmed to me by a "Conciliteur Fiscal".

   [/quote]

After reading what you said about this I wrote an email to our tax office and they confirmed that if we were paying CPAM charges on our own ie not affiliated to any other organisation through work or covered by any other means, then we could claim this allowance.

So thank you or else I would not have realised this allowance applied to us.

Sue [:)]

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