French income tax returns need to be submitted next month, for 2017 income, with most households now required to make an on-line declaration.
Even though you may be below the income level that would mean you pay no income tax in France (50% of the population), everyone who is resident is obliged to complete an income tax return.
If you own a second home in France, from which you earn rental income, you are also liable to French income tax and obliged to complete a tax return.
If you are unsure whether you are resident or non-resident there are a range of factors you can use to assess your fiscal status.
Cross border workers who have a family home in France, but who work in the UK (or other European country), are normally liable for income tax and social security contributions in the UK on their income earned in the UK.
You need to declare the income of everyone in your household, although there are particular rules concerning children over 18 years of age and unmarried couples.
Even though you may be taxed on some of your income in the UK or elsewhere, if you are resident in France you need to declare all of your worldwide income on your French tax return. This is done to establish the rate you will pay on any income earned in France.
Those with pensions from the UK are taxed in France, except for 'government service pensions' which are always taxed in the UK. Nevertheless, government pensions need to be declared in the relevant section on the French tax return.
There exist some tax allowances and credits that can be claimed, although they are few in number and not particularly generous.
On-Line Tax Declaration
Most households this year will be required to submit their return on-line, with forms available from 11th April.
Only if your net taxable income in 2016 was no greater than €15,000 can you submit a paper return. If you are making a tax return for the first time then you also submit a paper return, as you can if you have no internet connection.
In order to declare on-line you will need to go to impots.gouv.fr and click on 'Votre Espace Particulier' and create an account with 'Création de mon espace particuliere'
From your first tax notice (avis d'imposition) you will need to provide your:
- Numéro fiscal;
- Numéro d'accès en ligne;
- Revenu fiscal de référence.
There is no single tax return to complete, as there are different forms for various types of income, all of which is largely consolidated onto a Form 2042.
If you have previously made a tax declaration some of the form will already have been completed by the tax authority, but you need to verify the information is correct, particularly if your circumstances have changed.There
are number of guides on the market to assist in the completion of the
tax declaration, but care needs to be taken over their use as the tax
forms generally change each year and the completion guides are normally
published before the forms are available.
You will obtain an e-mail confirmation once you have sent your return.
Whilst the process may be a little bureaucratic and complicated, in practice most households pay little or no income tax in France. A couple on would need to have a net income of around €28,000 a year before they paid any income tax at all.
There are a variety of different ways you can pay your tax bill.
The deadline for filing a paper return is 17th May, for both residents and non-residents.
Otherwise the dates for on-line returns varies by department, as follows:
- Departments 01 to 19 (zone 1) - 22nd May
- Departments 20 to 49 (zone 2) - 29th May
- Departments 50 onwards (zone 3) - 5th June
- Non-Residents - 22nd May
The timescales for submission of the return are different for those who run a limited company in France, although if you operate a business as a micro-entreprise your business earnings should be submitted with your personal income tax return.
Even if you may pay little or no income tax you are likely to be liable for payment of the social charges on some of your income.
Certain pension income is exempt, notably for those on ‘E/S’ health cover exemption forms, and early retirees on government service pensions.
However, even though your pension income may be exempt you will pay the social charges on savings, investment and rental income. There are some bank account savings schemes that are free of tax and social charges.
Business owners pay the social charges throughout the year, although they will also pay in autumn on their other earnings, eg early retirement pension, investment or rental income.
In addition to your income tax declaration, if you think you may be liable for the French wealth tax (Impôt sur la Fortune Immobilière - IFI) then you also need to complete Form 2042-IFI.