The experts explain the main changes to French tax for the year commencing January 2019 that may affect expats in France or those intending to move to France.
The main changes to tax in France in 2019:
PAYE in France
The big change in France for 2019 will be the full introduction of PAYE (pay as you earn). Tax payment at source has been an option for some time in France but effective January 2019, a full roll out will be implemented. The tax authorities will inform employers and pension payers of the nominal income tax to apply, and payable tax will need be deducted at source. PAYE will not be deducted by French authorities on overseas incomes – but it is declarable on your tax return.
Tax stage payments
Tax stage payments are to change from twice a year to monthly. The last page of this year’s tax advice (for 2017 incomes) shows the calculation and the amount of monthly tax to pay from January 2019. It will still be necessary to submit a 2018 “Declaration de Revenus” in 2019. This registration of the tax return will regularise the tax due and takes into consideration tax paid by stage-payments or deducted at source on French based incomes.
Register your bank account
The tax authorities are asking people to register their bank account details, so that monthly stage payments can be deducted by direct debit.
French Property Income
Tax will not be deducted at source for French property income. This needs to be declared on the 2018 Declaration de Revenus.
From January 2019, income from savings such as interest and dividends will be taxed at a flat rate of 30% (consisting of 12.8% income tax and 17.2% social tax). French banks will deduct this at source. However in certain circumstances it is possible to opt out of the Income Tax deduction (but not out of the Social Tax). Your bank will be able to confirm if you are eligible, contact them if you haven’t received notification yet.
Interest received from overseas bank accounts and savings (such as a UK ISA) have to be declared on your French tax return.
Tax free savings
There are tax free savings accounts available in French banks such as the Livret A. Tax-efficient investment vehicles such as the Assurance Vie may also help reduce your tax.
By Paul Flintham, International Financial Advisor at Beacon Global Wealth Management,
www.beaconglobalwealth.com; enquiries @ bgwealthmanagement.net
The financial advisers trading under Beacon Wealth Management are members of Nexus Global (IFA Network). Nexus Global is a division within Blacktower Financial Management (International) Limited (BFMI). All approved individual members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission and bound by their rules under licence number FSC00805B.
And the information on these pages is intended as an introduction only and is not designed to offer solutions or advice. Beacon Global Wealth Management can accept no responsibility whatsoever for losses incurred by acting on the information on these pages.