How to declare taxes in France.
If you are moving to France , you will certainly have a lot to deal with. This includes the thorny but hugely important question of income tax: how it works in France, who has to file taxes, and the key dates to keep in mind. We’ve put together this quick guide to the entire process, so let’s take a closer look.
Who must file a tax return in France?
Anyone who lives in France and earns more than the tax-free threshold, which at the time of writing is €10,084, must file a tax return.
In January 2019, France adopted a Pay as You Earn (PAYE) tax system, which means that employers automatically withhold the amount of income tax due from your salary. For example, at the time of writing this article, an 11% tax is payable on income between €10,085 and €25,710.
This PAYE system means that, as an employee, you will pay your taxes incrementally throughout the year. But it’s important to note that you still need to file an annual tax return, as a single person or as a couple/household.
When is the tax return due?
The French fiscal year is identical to the calendar year, from January 1 to December 31. The deadline by which you must submit the form varies depending on your administrative district or department in which you have settled. It is also possible that the date will change from year to year, so it is essential to be attentive to the announcements of the dates.
How to declare taxes in France.
How can the tax return be filed?
It is mandatory to file the tax return online through the official government website , with some exceptions. For example, if you are unable to do so due to lack of internet access or disability, or if you have recently moved to the country.
In the latter case, you can submit a paper form – Cerfa no. 2042 – which you can download from the government website. Any relevant identity documents required, such as your passport or visa, must be detailed on the form. Once you have fulfilled this obligation in the first year, you will be given a unique tax identification number, also known as an SPI number. You will then be able to create a personal online account on the government website to file your next tax return online.
The online tax return form is usually pre-filled with the relevant information about your income, which means that all you have to do is simply check if the information is correct. Remember to notify the tax office if there are any changes in circumstances – for example, if you have moved house, married or divorced.
Depending on your circumstances, you may be entitled to claim deductions on what you pay in taxes each year. As of this writing, tax credits can include:
50% of the cost of out-of-home child care (for example, the cost of nursery school) for children under the age of six, up to a maximum of €1,150 per year.
50% of the cost of hiring a domestic worker, up to a maximum of €7,500 the first year and €6,000 thereafter. This amount increases by €1,500 per child, up to a maximum of two children.
Tax reduction for children in secondary education (€61 for high school, and €153 for high school) and university (€183).
A percentage of the cost of installing energy-saving heating and power generation technology, based on your specific circumstances.
A percentage of the amount you donate to charity, depending on the type of charity it is.
What happens after I file the tax return?
Once your tax return has been processed, you will receive a tax notice. It will provide a summary of your financial situation with respect to taxes and will tell you if there is a balance that you must pay, in the event that you have had very little tax deducted during the last financial year. Alternatively, it can tell you that you are due a tax refund.
If you owe the government taxes, they will be automatically deducted from your bank account. At the time of writing this article, the total amount will be deducted if it is €300 or less. If the amount you owe is greater, the payment will be divided into four monthly installments.