your savings: important changes in 2007

[Clair]

Two important changes to your savings in 2007

• the CODEVI ceiling is raised from €4600 to €6000 from 01/01/07.
• it's tax free

• It earns 2.75% pa (rate is revised twice a year).
• It was originally set-up to finance loans to PME (petites et moyennes entreprises).
• From 2007, it will also finance cheap loans to individuals who want to save energy in their homes.

• The prélèvements sociaux (tax on interest from savings) will be payable in the same year it is earned, so double whammy for some

• see this post for a refresher
• this is applicable if you have selected to declare your interest via your tax form

• up to now, if you chose to declare via your tax form (IRPP) you paid in arrears (i.e earn interest in 2005, declare and pay tax on it in 2006), unlike people who pay 'at source' (PLF at 16%) as you do in England for instance

• in 2007, you will declare and pay in 2007 for interest earned in 2006 (as declared on your 2007 tax form)
• you will also pay 'at source' during 2007 for interest earned in 2007.
• this will help plug the Social Security deficit by bringing every saver into line