5. Calculating Your French Income Tax Liability
- 5.1. Composition of Your Household
5.2. French Income Tax Rates
5.3. French Tax Allowances
5.4. French Tax Credits
5.4. French Income Tax Credits
The standard tax breaks in France take the form of either tax relief (réduction d’impôt), or a tax credit (crédit d’impôt).
A réduction d’impôt is an allowance against the amount of income tax payable, whilst a crédit d’impôt is a payment to you by the tax authority.
A tax credit will, therefore, be important to you, even though you may pay little or no income tax in France.
The main tax credits are:
- 5.4.1. Home Energy Conservation
- 5.4.2. Home Adaptations
- 5.4.3. Child Care
5.4.1. Home Energy Conservation
An allowance ranging from 11% to 40% for the installation of certain energy conservation works in the family home. It may be an existing property, or one to be constructed, but second homes are not eligible.
The allowance is called crédit d’impôt development durable.
Normally only the material costs have been eligible, but in the case of solar glazing and thermal insulation installation some labour costs can also be charged.
However, the tax credit is only available if the work is carried out by a professional tradesman, so DIY schemes are not eligible.
The measures for schemes carried out in 2012/3 include roof and wall insulation, double glazing, rainwater harvesting systems, heat pumps, solar energy, and wood burning stoves.
The maximum eligible costs are €8000 per person, or €16,000 for a couple.
The rules are quite complex and caution is needed.
5.4.2. Home Adaptations
An allowance of between 15% and 25% against the cost of specific works to give greater mobility or safety to elderly or disabled persons in the home.
The allowance is called crédit d’impôt l’aide à la personne.
As with home energy conservation works, labour costs are not eligible. The maximum eligible costs are €5000 for a single person, which is doubled for a couple.
5.4.3. Child Care
An allowance of 50% up to a maximum of €2300 per child under 7 years of age towards the costs of child care outside of the home, called les frais de garde d’enfants.
Only those costs actually incurred by you are eligible, so if you receive assistance from your employer, or the social security system, the allowance is only available on costs net of this assistance.
No allowance is payable where the child is attending a maternity school.
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