Taxes in France for 2009
Friday 16 January 2009
The tax bands for payment of income tax have all been increased by 2.9%. A couple with around less than €17,500 'taxable income' (ie, after allowances) would not expect to pay income tax in France. You can read more at French Income Tax Rates 2009.
To finance changes to the social security system, the rate of the social charges CSG/CRDS increases to 12.1% on rental income, savings and investment income. Indeed, this rate applies for rental income that arose in 2008. You can read more at Tax Increase on French Rental and Investment Income.
The amount of tax relief that can be granted in any single year is capped at 10% of personal income plus €25,000. However, there are so many reliefs excluded from the definition that, even if you are fortunate enough to be affected, there is probably no need to lose any sleep over it!
One of the exemptions concerns tax relief on the renovation of properties in conservation areas, although there is also a tightening of the relief available on such properties.
The tax bands for payment of French wealth tax have all been increased by 2.9%. No wealth tax is payable on total assets less than €790K, and there continues to be a 30% allowance against the value your French property, provided it is your principal home. You can read more at French Wealth Tax Rates 2009.
The tax bands for payment of French inheritance tax have all been increased by 2.9%. There continues to be no liability to inheritance tax between man and wife, or those in a French civil partnership. You can read more at French Inheritance Tax Rates 2009.
The tax bands for payment on which French gifts tax becomes payable have all been increased by 2.9%. You can read more at French Gifts Tax Rates 2009.
If you buy a new vehicle that emits more than 260gr C02 per km, you will be liable for a pollution tax of €160 per year. Conversely, there remains a single bonus payable on the purchase of a low polluting vehicle, and a cash back of €1000 for your old car over 10 years old when you purchase a new one. We shall be saying more in a future Newsletter.
Social Security Contributions
The rate of social security contributions remains unchanged for individuals and those running a small business, although there is a small increase in the rate of complementary pension contributions for artisans.
Of perhaps greater significance, the ceiling figure used to calculate many of these social security contributions (and benefits) increases by 3.1% to €2859 per month. Minimum contributions are based on a percentage of this ceiling. A small business adopting the micro-social tax regime would not be affected by this change.
Letting Furnished Accommodation
There has been a tightening of relief available, and a tightening of the regulations giving access to the status of 'professional landlord'. However, we await confirmation that registered gîtes and chambres d'hôtes are excluded from this measure, as seems to be the case. You can read more on the original proposals at Tax for Chambres d’Hôtes and Gite Owners.
Local French Property Taxes
Local authorities have already sent out their tax bills for 2009. You can read more about what the average bills were in each commune at Local French Property Taxes.