SHARE
COPY LINK

TAXES

Be aware of the ‘500,000’ mistaken French tax declarations

Around 500,000 pre-filled out income tax declarations sent out to taxpayers in France contain an error, it has been announced. And it's up to the taxpayers to fix them.

Be aware of the '500,000' mistaken French tax declarations
Photo: AFP
Hundreds of thousands of pre-filled out income tax declaration forms have been under calculated as a result of a computer bug which hit the software used to produce them in March.
 
As a result of the computer bug some boxes on the forms have been left empty, according to Le Canard Enchaine newspaper. 
 
That means that those who use the paper tax forms, which accounts for around 50 percent of taxpayers, could be set for even more of a headache during French tax season this year as they will be responsible for correcting any errors on the forms themselves. 
 
Unsurprisingly the announcement has prompted outrage.
 
“They can't be serious!” Olivier Vadebout from the public finances division of the hard left CGT union told Le Parisien. 
 
“The taxpayers who return the paper version, signing it without really looking, may be punished. And some may not notice the letter of correction from the tax authorities,” he said.
 
But what exactly happened?
 
The computer bug which caused the mishap hit the software responsible for sorting the data of the national insurance fund for the elderly (CNAV). 
 
But it won't only be retirees who are affected. 
 
It turns out that the same software also collects all of the information on taxpayers including wages and social security contributions.
 
Until now, companies sent an annual statement regarding the contribution of their employees but this now happens on a monthly basis and it's this switch which is to blame for the bug.
 
On a positive note for taxpayers, however, these teething problems will hopefully all be for a good cause.
 
The reason for the change in the system, according to some sources, is the government's plan to finally deduct taxes at source from January 1st 2019.
 
But when your tax declaration arrives this year, be sure to read through it with an eagle eye. 
 
For members

TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

Manual widget for ML (class=”ml-manual-widget-container”)

Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

SHOW COMMENTS