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How to tackle your French tax return

Since it's that time of the year again to tackle your tax return, The Local gets some sound financial advice from Siddalls France, specialists in tax, inheritance, investment and pension planning for foreign professionals in France.

How to tackle your French tax return

The month of May in France always means tax return month – otherwise know as La Déclaration des Revenus.

The French tax year is a straightforward, calendar year and the deadline for returning your completed declaration of income earned in 2012 is May 27, 2013.

Those of you already in the system should have received your partially completed form (or préremplie) at the end of April.

As in previous years, the tax authorities have granted additional time for those who make their declarations online at www.impots.gouv.fr. However, the amount of extra time given depends on the number of the department you live in.

For example, June 3 for departments 1-19, June 7 for departments 20-49 and June 11 for remaining departments. The online facility will be available from the beginning of May.

First-timers must collect a tax declaration from their local tax office Centre des Impôts or alternatively download a copy from the website above.

If you have moved to France part way through the year, you will only declare income earned since the date of 'arrival'. Any tax due is normally collected in September.

Once you have completed your first tax return, you can complete subsequent returns online at www.impots.gouv.fr.

What forms will you need?

Whilst theDéclaration des Revenus comprises a variety of forms, according to circumstances, here are some of the main forms that apply to expatriates:

Form 2042

This is the main tax form, which you will receive if you are already in the system. You should use this to declare your worldwide income and gains.

Form 2042C (Complementary)

This is an additional form which is required if you have received income from furnished letting or chambres d’hôtes, or where you have paid tax in the UK that needs to be offset against French tax.

Form 2047

This is an additional form for any income received outside of France. Foreign income must be declared on this form, as well as on Form 2042.

Form 3916

This form covers details of any bank accounts located outside of France.

What to declare?

As a French resident, all of your worldwide income and gains should be declared on your French tax return. Any income that is normally taxed outside of France, for example UK public sector pensions or UK rental income, will still be used to calculate your overall tax liability.

The Double Tax Treaty will ensure, however, that you do not pay tax twice on this income, but these figures are needed to calculate the rate at which your other income should be taxed.

What exchange rate to use?

Some tax offices advise people to use the £/€ exchange rate at the end of the year. In theory, you should have kept a note of the exchange rates applicable to your sterling-based income as you received it.

However, for income which is received regularly such as a pension, for instance, the authorities will accept the use of the average exchange rate for the year – details of which are made public from various sources, including the official French revenue website previously noted.

Wealth Tax (Impôt de Solidarité sur la Fortune or ISF)

Major changes to the Wealth Tax declaration will affect some people. From this year, anyone with taxable assets between €1.3million and €2.57 million as of January 1, 2013 will declare the asset figure on their income tax return. 

Only those with more than €2.57 of taxable assets will have to continue making a separate wealth tax return in June.

This article was produced by The Local and sponsored by Siddalls France

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TAX

The vocab you need to understand French taxes

Declaring and paying taxes in France can be a complicated affair, especially for first-timers, and the intricate French vocabulary does not exactly simplify the process. This language guide might help.

The vocab you need to understand French taxes
Illustration photo: Miguel MEDINA / AFP

If you are encountering the French tax system for the first time, just looking at the various forms can make you dizzy, as the vocab isn’t exactly everyday-French.

Even French natives sometimes struggle to understand what they are being asked about, which is why the government has created a tax lexicon (available HERE).

It is 23 pages long, but we have picked out the key terms and added a few that might be unfamiliar to foreigners.

If, however, you are looking for a specific term that doesn’t appear in the list below, we recommend you check the official guide. 

We have also explained in detail how to fill out the annual tax declaration HERE.

Nom – as with all French forms, nom refers specifically to your surname or family name. Your prénom (first name) comes later. Tax forms generally ask for your nom de naissance which is the family name you were born with (even if you have changed your name through marriage) and will then ask for nom auquel vos courriers seront adressés or name for correspondence to be addressed to.

EXPLAINED: What’s in a name? Understanding how to fill out forms in France

Avis d’imposition – tax notice. This is for your annual tax return. If your main residence is in France you must fill in a tax return – even if all your income comes from another country. France has double taxation agreements with most countries, so if you have already paid tax on, say, income from a rental property in the UK you will not be liable for more tax in France on the same income. But you must still tell the French tax man about it.

EXPLAINED: Who has to make a tax declaration in France in 2021?

Déclarant – refers to the person declaring the taxes. The verb is déclarer and un déclarant is la personne qui déclare – the person who declares. The form has spaces for two déclarants because married couples and those in a civil partnership file a joint return. If you are declaring as a single person just ignore the column for déclarant 2.

Foyer fiscal – tax household. France bases taxes on the household and you will be asked about it in detail when filling out your declaration. Couples who are married or in a civil union (Pacs) should make one joint declaration rather than two. If you got married halfway through the year you can now declare one common declaration for the whole year.

Etat civil – civil status. Choose between célibataire (single), marié (married) or Pacsé (in a civil partnership). 

Parent isolé – single parent. This only goes for those who were not living with a partner on December 31st the year before declaring the taxes. If you got divorced, separated or lost your partner after that date, you have to wait until next year to declare it. In addition to parents, this category also includes singles who are taking care of a disabled person.

Enfant mineur – child under 18 years old.

Enfant majeur – a child over 18 years old. Parents in France may attach their adult child to their tax declaration until the age of 25, under certain conditions.

READ ALSO: What the French government doesn’t tell you about filing taxes

Personne à charge – means ‘person to take care of’, and means that you have a person in your household that you are financially responsible for, usually referred to in English as a dependant. 

Concubinage – a couple who live together but aren’t married or in a civil partnership. If that’s you, you’re not allowed to tick the box of parent isolé if you have children.

Numéro de sécurité sociale – social security number. If you’re registered with French social security this number (15 figures) appears on your Carte Vitale health card and if you’re an employee it should appear on your payslips. If you don’t have a social security number in France, tick the box “pas de numéro de sécurité sociale“.

Prélèvement à la source – This sounds confusing, because it’s sometimes translated as “withholding tax”. However it just means the tax that is automatically deducted from your salary each month if you are an employee. Usually referred to in English as ‘taxation at source’ or PAYE (pay as you earn), it’s a relatively recent innovation in France.

READ ALSO: The French tax calendar for 2021 – which taxes are due when?

Revenus des indépendants – income for the self-employed. Whereas employees get their taxes deducted automatically from their payslip, self-employed people, contractors or freelancers have to declare all their income and social benefits, if any, on their tax declarations. 

Micro-entrepreneur – this is a specific professional status that self-employed people may opt for if their income is below a certain threshold. It used to be known an auto-entrepreneur.

Comptes à l’étranger – foreign bank accounts. If you have a bank account in a country other than France, you have to declare that to the tax man, or risk a €1,500 fine (€10,000 for those with an account in a country that doesn’t have a tax evasion deal with France) per account. New international banking rules aimed at money-launderers mean it is increasingly easy for countries to find out this information.

Contribution à l’audiovisuel public – this means ‘contribution to the public audiovisual’. It is the French equivalent of a TV licence and is paid by almost everyone. You pay it if you have a TV in your property, even if you don’t watch French TV.

Abattement – rebates. France has a long list of specific tax rebates, some of which are directed professional groups while others go to parents for costs like childcare and domestic help. Find out more about the deductions available here.

Paiement en ligne – online payment.

Coordonnées bancaires – bank information (such as the account holder’s name, account number, BIC and IBAN) you are given the option to add this to your tax declaration so that payments can be taken – or refunds credited – directly.

Taxe d’habitation – the housing tax paid by those living in a property, not the owner, is in the process of being phased out and most people won’t have to pay it this year. However second home owners are excluded from the phasing out and still have to pay it, bar a few exceptions. This is separate to the annual tax declaration and bills are sent out in the autumn.

Taxe foncière – this is the tax for property owners, second home owners pay both this and the taxe d’habitation. The tax on property owners has risen in many areas over the past couple of years.

READ ALSO What is taxe foncière and do I have to pay it?

Revenus fonciers – this means ‘property income’, but it only refers to income coming from properties that are rented out unfurnished. If you rent out a furnished property that also has to be declared, but under the box called bénéfices industriels et commerciaux (BIC).

READ ALSO: Five things to know about renting out your holiday home in France

Micro foncier – the box to tick if the revenus fonciers are up to €15,000 annually, which allows for a 30 percent tax rebate on the gross income.

Régime réel – the box to tick if the revenus fonciers exceed €15,000 annually, in which case there won’t be any tax rebate available.

Pensions – pensions. You have to declare any pensions you receive, whichever type it may be, even if they are paid by another country. There are several other similar terms that belong to the same category as pensions.

Allocations – economic help schemes.

Indemnités – allowances.

Retraites – pensions.

Rentes – annuities. 

Prime – bonus.

Revenu brut – gross revenue.

Revenut net – net revenue.

Demande gracieuse – means ‘gracious request’ and is what you may do if, upon receiving your tax notice, you realise you could have paid less tax if you had ticked a different box somewhere or given additional information. The term ‘gracious’ is there to signify that the tax man can choose to accommodate your request if he so pleases, but there’s no rule saying he has to. As a general policy we would recommend always being very polite to tax authorities.

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