Tax Allowance

[cheryl]

Can anyone tell me the allowance for a couple before tax is payable, or is there a website where I can find it?

Many thanks

Cheryl

[LesLauriers]

In simple terms : Take your total household earned income, take away 10% then take away a further 20%.

Divide the result by the number of parts your household represents ie 1 person = 1 part, 2 persons = 2 Parts, 3 persons = 2.5 parts, 4 persons = 3parts, etc.

Apply the rates of tax to the result as follows

0 to 4262 @ 0%
4263 to 8382 @ 6.83%
8383 to 14753 @19.14%
14754 to 23888 @28.26%
23889 to 38868 @37.38%
38869 to 47392 @42.62%
47393 & above @ 48.09%

Then multiply the result by the number you divided your income by originally.

If you are on a pension the 10% deduction is limited to maximum of 3214 for 2003.

Remember of course that pre old age pension, when not covered by an E 106, 95% of income is subject to 10% social charges and all income over 6721 is subject to 8% health charges. Ex Government employee pensions are taxed in the UK but still declared in France. All unearned income is subject to 10% social charges, tax at your highest rate and health cover when applicable. E&oe.

[cheryl]

Many thanks for your comprehensive reply.

As I understand it then, for a couple on an income of €14,000, there would be €147,60 income tax, €1330 social charges and €582,32 in health charges (or is the €6721 allowance before health charges per person?).

I'm assuming that a pension counts as unearned income.

Thanks again

Cheryl

[LesLauriers]

Pension is counted as earned income and if it is an annuity it is taxed more favourably than a company pension.

I have input your figures on the government tax site and it gives the following results:

Tax 0€ CRDS 70€ Revenu fiscal de référence 10080€. Health charges are 10080€ - 6721€ = 3359€ x 8% = 268.72€.

Your tax is 0€ because of the "décote" an allowance for low income levels. Clearly any interest from savings accounts, Isa's Peps etc would impact upon your final taxation figures.

My original posting shows an additional social charge of 9.5% on 95% of pension, which I understand kicks in after expiry of an E106 and until you obtain an E121. I am still on an E106 and therefore another forum member may be able to confirm this, but at the moment that's how I understand it. The 6721€ allowance is a household allowance not by individual. 

If your RFR is below 10197€ for 2003 you are entitled to free basic health cover so the 268.72€ is not payable.

[cheryl]

Many thanks for your help, but gosh, it's confusing isn't it?

We're still covered by an E106 (til the end of the year), but the tricky bit comes next year when my company pension becomes payable.

Am I correct in thinking that the lump sum part of the pension (which isn't a government pension) will be taxed as income in the year I receive it?

Cheryl