Job Discussion Forums

[Thibsy]

Hello,

I need some help regarding tax in France. Now, I understand that every month, you lose approximately 20% of your gross salary but I have heard rumours that at the end of the year the government takes another chunk in income tax. Seeing as how we are poorly paid :( I would fall into one of the lower tax brackets. Has anyone some experience regarding this matter?

Thibsy

[go2guy]

Yep, you've pretty much got it right. The income tax that will be deducted usually comes in somewhere around a month's salary, but it depends on your situation---i.e. whether you are single/married, have kids, etc. Yes, French taxes are exhorbitant but there are upsides to this somewhat socialist system (quick access to excellent medical care for starters, plus various other "social" advantages that do not exist in countries where taxes may be lower). Hey, no one is going to get rich teaching anyway.

[Luder]

You have to pay income tax only if you declare your income. The tax authorities aren't going to come looking for you. In fact, to pay them the first time, you have to take the initiative. Go to the "Imp�ts" website to see how.

You may not want to declare your taxes at all, but if you're in the market for a bank loan or want to renew your visa, you'll need to show you have.

If your income is low, the tax bill won't be so high--around 5% of what you declared. If it's really low, you won't have to pay anything.

[go2guy]

Hmmm, not sure I agree with you, Luder, on this voluntary aspect of paying taxes. Sure, if you roll into France for a year and leave without declaring income tax there isn't going to be much of a problem (especially if your income isn't too high). However, from my experience (and I've done it now as both "vacataire" and "travailleur ind�pendent") the tax authorities certainly WILL find you and expect you to pay your due. Once you're in the system (ie having the "social charges" deducted at source as a vacataire, or at intervals for indies) you can be sure you'll get the income tax forms in your mailbox by year's end to be completed by April of the following year. Perhaps people from England could come and work in France for several months and take the money back there with them, but then the British tax authorities would certainly want to know about it, right? Remember, the only certain things in life ... death and TAXES!

[rogan]

I think you are mixing Social Security contributions with Income tax.

SS is a deduction from salary and is designed to pay for sickness, unemployment and pensions.

Tax is paid on earnings in the previous years.
So the declaration made in April 2005 was for earnings in France between January and December 2004. That payment should be made before November 2005

It is possible to avoid paying tax on 2005 earnings if you are not likely to be in France in April 2006 (no declaration) and if you will not be in France in November 2006(when payment is due)

However, most countries have a reciprocal arrangement with the French Authorities (espacially other EU countries) and your home country could ask for an E301 (I think it is) showing earnings and tax paid in other countries.

This is to avoid a double payment.

The difference is that income tax is paid at source in the UK - ie, directly from your salary each month.
In France payments are made directly by the worker after the financial year in which those earnings were made.

For example. I worked in France for 6 months in 2004.
I declared my revenue in April 2005 and the tax authorities sent me a notice of how much I was expected to pay.

I paid the tax authorities in November 2005 for my 2004 earnings.

Hope that clears up the situation for you.

[John Hamilton]

[go2guy]

There's no confusion, "social charges" are "social security" and then there's income tax.

As an indie you actually have FOUR authorities to deal with: (1) URSSAF - contributions to family allowance schemes, etc., and they're a sort of "registrar" for all indies; (2) CIPAV - for retirement / pension contributions; (3) RAM - the division of CPAM (the "s�cu sociale" for medical contributions) for indies, and to whom you pay to have access to the French medical system, including the right to have a supplemetary "mutuelle" cover what the s�cu doesn't; and finally (4) "la fisc", aka the income tax folks!

My income tax for 04 was 9.5% of 63% of gross earnings (that's the formula they use for indies earning under 27k -- you go over that and you have to chose between other models). The final tally wasn't too bad on that, it's CIPAV and URSSAF that beat you up the most!

As for vacataires, all the social (security) stuff is deducted at source, then you are taxed (INCOME tax) on your net earnings after those deductions, which does usually work out to about a month's salary.

If you're coming and going, then, yes, you can "play" the system, but as I said before if you're planning to stay in the country as a resident "dey will git ya"!

Et voil�, the long and short of it in both ways (indie/vacataire). From personal experience and much discussion with several others, that's pretty much how it works.

� plus!

[John Hamilton]