I’ve heard from Que Choisir that there will be significant tax changes effective next year (i.e. taxes due on 2020’s income). There will be reductions. Can anyone please explain just what they might mean in general? The summaries QC give are full of the usual accounting mumbojumbo so it’s difficult to understand.
are you able to post a link to the resource you mention?
Tax due on 2020 income will not be payable until late 2020 and declared about May time 2021… are you sure you don’t mean tax due on on 2021 income?
A quick scan and goggle translate of the text doesn’t raise (for me anyway) any worries. Its the Gouvernment honouring its promises about tax reductions.
Of significance -
The progressive tax schedule applicable to your 2020 income will still have 5 income brackets. But the tax rate for the 2nd bracket will be reduced from 14% to 11%. In addition, the entry thresholds for the 3rd and 4th installments, taxed at 30% and 41% respectively, will be lowered. These changes will make it possible to concentrate the tax cut (of 5 billion euros) promised by the public authorities at the end of 2019 on the 17 million households that are the least taxed, and to prevent it from benefiting the wealthiest households ( taxable in the 41% and 45% scales).
The tax reduction granted to low-tax households will be adjusted, which will allow more taxpayers to benefit from it. Its scope will be extended to all households whose gross tax (calculated on 2020 income) is less than € 1,720 (for singles) or € 2,847 (for couples), whereas this year , it benefited households whose gross tax (calculated on 2019 income) was less than € 1,611 or € 2,653.
Another change, the discount will be equal to the difference between € 779 (single) or € 1,289 (couple) and 45.25% of your gross tax in 2021, while it was equal to the difference between € 1,208 or 1 € 990 and 75% of your gross tax in 2020. Result, if you are single and declare € 25,000 in taxable income, you will pay € 486 less in tax in 2021 than in 2020, thanks to the changes in the discount and of the tax schedule.
Taxpayers who have an electric vehicle charging system installed by a professional in their main residence and / or their secondary residence between 2021 and 2023 will be entitled to a tax credit. Its amount will be equal to 75% of the acquisition and installation expenses, and it will be capped at € 300 per charging system. For the same home, the benefit of the tax credit will be limited to one charging system for single people and two systems for couples subject to joint taxation. The benefit obtained will be attributable to taxes due in respect of the year of payment of the expenditure, and any excess will be refunded by the tax authorities.
Good to know: The economics of certain tax reductions and certain tax credits are changed for expenses paid in 2020. For more information, see our article Tax cuts, what’s changing in 2020.
Most of the income received in 2020 has already borne tax with the withholding tax. Your salaries and retirement pensions have been subject to withholding tax withheld by your employer and your pension funds, your professional benefits and rents to a tax deposit taken by the tax authorities from your bank account each month or each trimester. The tax that will be calculated by the tax authorities on this same income next year, from the declaration that you will file in May or June 2021, will be compared with the withholding taxes paid in 2020. If the balance is negative, l The withholding tax overpaid this year will be refunded to you during the summer of 2021. If it is positive, you will have to pay additional tax between September and December 2021.
So, from what I can see, all good news… remembering of course that the first round of the French presidential elections are due in April 2022
Thanks Graham. We usually end up paying either very little tax (<€100) or indeed nowt. In my dreams I thought these revisions might actually result in us getting money from the State!
The tax take will no doubt be compensated in other areas…
whilst we are talking about tax
This year we earnt 0 as apposed to the year before which was much more than 0
we are And E and got some refund, however there will be no assistance re this year.
I have understood it have I,
My accountant is not clued up on this