France to free 1.8m households from taxes

The French Prime Minister Manuel Valls announced on Friday that the government will move to help out the country’s most hard-up tax payers by exempting 1.8 million households from income tax.

France to free 1.8m households from taxes
French PM announces that 1.8 million households will be freed from income tax. Photo: Joel Saget/AFP

There was good news for hundreds of thousands of France’s most longsuffering tax payers on Friday.

The French Prime Minister Manuel Valls announced that the government would take steps to ease the fiscal burden on the country’s most hard-up by exempting 1.8 million households from paying income tax on their 2013 earnings. 

"We need to lower taxes in our country to restore purchasing power to our citizens, to the working classes as the middle class," Valls told Europe1 radio.

“The measure that we are going to take will permit 1.8 million households to be free from paying income tax,” he added. The PM had initally suggested 650,000 households would benefit, but said the government had decided to strengthen the measure to demonstrate its "commitment".

The PM said the measure will concern the taxes to be paid in September 2014 on income earned in the year 2013. The PM did not commit to introducing a similar measure for 2014 or 2015. The tax cut, which will cost the state around €1 billion,  will be included in the finance bill to be put before parliament in June.

As well as the 1.8 million households that will be exempt from paying income taxes a further 1.2 million lower income households will see their annual bills cut, Valls promised.

The Socialist government has been under pressure to cut taxes for France’s lower classes, who have been most affected by ongoing economic gloom and record high unemployment.

President François Hollande’s popularity is at a record low for any French head of state as traditional Socialist party voters turn their backs on him.

Adding some details to his promise Valls said the tax ememption will benefit single people earning around the minimum wage of €14,000 a year, or couples with two children who have a combined monthly salary of around €3,600. According to the figures released by the Prime Minister's office the exemption will save those single people  €300 on the annual tax bill and couple €750 euros.

Valls is confident the measure will help improve the lot of the country’s most in need. Coming just nine days before the European elections, the measure could be seen as electioneering on the part of a Socialist party heading for another disastrous poll result, following the recent local elections debacle.

The PM rejected this accusation.

“For five years, our citizens have been subject to tax hikes. It’s too much,” Valls said. “This is not just a gesture, this is a strategic measure to give back some purchasing power to our compatriots.”

In France income taxes are paid by households rather than individuals, although other ‘taxes’ known as social charges are deducted from individual salaries and bring in more money to state coffers.

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Timbre fiscal: Everything you need to know about France’s finance stamps

If you're doing a French admin task, you might be asked to provide a 'timbre fiscale' - here's what these are and how to get them.

Timbre fiscal: Everything you need to know about France's finance stamps

In France, you can buy  a very particular kind of stamp to cover the cost of a titre de séjour, or French passport, to pay your taxes, get an ID card if you’re eligible, or pay for your driving licence.

Basically a timbre fiscale is a way of paying a fee to the government, and some online processes – such as the tax offices – now have the more modern method of a bank transfer or card payment.

However there are plenty of official tasks that still demand a timbre fiscale.

In the pre-internet days, this was a way of sending money safely and securely to the government and involved an actual physical stamp – you bought stamps to the value of the money you owned, stuck them onto a card and posted them to government office.

They could be used for anything from paying your taxes to fees for administrative processes like getting a new passport or residency card.

These days the stamps are digital. You will receive, instead, either a pdf document with a QR code that can be scanned from a phone or tablet, or an SMS with a unique 16-digit figure. Both will be accepted by the agency you are dealing with.

Once you have the code you need, you can add this to any online process that requires timbre fiscaux (the plural) and that will complete your dossier.

You can buy them from a properly equipped tabac, at your nearest trésorerie, or online

Paper stamps remain available in France’s overseas départements, but have been gradually phased out in mainland France.