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DECLARATION

The French tax breaks you don’t want to miss out on

It's time to declare your taxes in France. Here is everything you need to know about how you can legally pay less.

The French tax breaks you don't want to miss out on
Photo: AFP
Tax declaration season is open in France (CLICK HERE to find out what you need to know).
 
In France, there are a number of ways to reduce your tax bill, if you employ a cleaner at home for example or your children are in childcare.
 
So it's a good idea to make sure you know about all the different tax breaks available.
 
There are three types of tax breaks. A tax deduction (called abattement fiscal in French), is taken off the total taxable income you declare. The boxes to fill in here are found on the main tax declaration form.
 
Photo: AFP
 
You can apply for a deduction if:
 
  • You're in a specific profession (if you are a journalist with a French press card or a qualified childminder, for example).
  • You have professional costs such as travel to work, equipment, tools, meals and some other work-related expenses. Be careful to keep all your invoices though, as you may need them as proof.
  • You provide financial or other support for your adult child or another dependent. This is called a pension alimentaire.
 
Tax reductions and tax credits (which are both taken off your tax once it has been calculated based on your declaration) are declared on another form (n° 4042 RICI), downloadable here.These tax breaks apply under the following circumstances:
 
Family: If you have children, you are eligible for several tax breaks but you must declare your offspring on the main tax declaration form.
 
Childcare: If your child was born after December 31st 2010 and goes to a crèche or is looked after by a nanny outside the home, you can get a 50 percent tax credit within a €2,300 limit per child.
 
For unmarried couples, only the parent who has listed the child on his or her tax form can apply for it. You can also benefit from this tax credit if your child is looked after at home.
 
Click here for more details. 
 
Photo: stokkete/Depositphotos
 
School: If your child attends a state or private secondary school or was in higher education by December 31st 2017 and does not do any paid work or have a work contract lined up after the end of his or her studies, the following amounts will be reduced from the final tax bill: €61 per child for collège students (the first 4 years of secondary school), €153 euros per child for lycée students (the last 3 years of secondary school) and €183 per child in higher education.  
 
Home: Home improvements in your main residence such as making your home more environmentally friendly or adapting it to the special needs of its inhabitants are others ways of reducing your tax bill.
 
If you have carried out energy-saving building work such as roof insulation or installing a heat pump in your family home, a tax credit of up to 30 percent is available.
 
However, the work must be carried out by a professional tradesman. The maximum eligible costs are €8,000 per person or €16,000 for a couple. The type of equipment and other investments that qualify for the CITE tax credit (crédit d’impôt pour la transition énergétique) are very specific so make sure you are aware of the rules.
 
If you have adapted your home to cater for the needs of an elderly or disabled person such as installing specific toilets and sinks or special lifts, you can benefit from a tax credit of between 25 percent to 40 percent for a maximum sum of €20,000.
 
 
 
Domestic help: Tax credits of up to 50 percent are available if you employ someone – who is not a family member – to help you with household chores within certain ceiling limits, in some cases.
 
If a person looks after or tutors your children, cares for an elderly or disabled person, helps out with gardening (up to €5,000) or DIY (up to €500) or provides internet and computer assistance (€3,000) within a maximum total limit of €12,000, you can benefit from this allowance.
 
Remember though, all employees must be registered. Go here for more details.
 
Rental property: If you are a French resident and own a property in France which you let out under certain other conditions, you may get tax credits.
 
Two laws cover this section: the ‘loi Pinel’ and the ‘loi Duflot’. Both require the properties to be leased out for at least 6 or 9 years. Go here for the full details. 
 
Donations: If you’ve given money to charity but no more than 20 percent of your total taxable income, a tax reduction of 66 percent of the donation will be shaved off the total of your tax bill.
 
Financial investments and banking: A number of tax breaks exist for those who have invested in small and medium sized companies (called PMU). If you have a life insurance policy, premiums within a certain limit will not be taxed. 
 
You can download your tax forms here and find out about all the tax breaks available on the government website.
 
By Emilie King
 

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TAX

Reader question: Where can I find professional help with the French tax declaration?

There are lots of people advertising their services to help with the annual French tax declaration but you need to make sure that anyone you hire has the right qualifications - here is how to check.

Reader question: Where can I find professional help with the French tax declaration?
Photo: Photo by Tim Gouw on Unsplash

Question: I need some help with the annual French tax declaration and I’ve seen all sorts of different self-proclaimed experts offering their services, but what should I be looking for when I instruct someone in this area?

Unlike in the UK where swathes of the population including salaried employees and pensioners are generally exempt from filing a tax return, in France almost everyone has to complete the annual tax declaration – even if they don’t owe any tax.

READ ALSO Who has to fill in a tax declaration in France?

And the combination of complicated tax jargon and French bureaucracy is enough to strike fear into the hearts of many. So where can you get help?

Online

There are lots of English-language guides to French tax forms and the French tax website even has a section in English to help out foreigners.

You can head to The Local’s Tax Declaration section where we’ve put together series of guides and Q&As with experts including on the 2021 deadlines, who has to declare, what you need to tell the French taxman about and some handy vocab for the form.

The tax declarations have now moved online and once you have registered and filed for the first year, the process is relatively straightforward.

Professional help

But if you feel that your French is not up to the task, or your financial affairs are very complicated or you’d just rather hack off your own foot than spend an afternoon filling in French tax forms, you might prefer to pay someone to help you.

There are lots of people who advertise their services in this area, particularly in forums or online groups for foreigners, but be careful that you hire someone with the correct qualifications.

We asked chartered accountant Faten Amamou for her tips.

She said: “French tax returns can seem complicated, but if your financial affairs are straightforward, you can probably file your own. The calculations will be worked out for you, so you don’t need to do any complicated mathematics.”

But if you’re looking for professional help you have two main options – an expert comptable or a fiscaliste.

Faten said: “Tax authorities recommend that you fill your individual and household tax returns with an expert comptable.

“This assures them your tax return will be accurate, and they have a knowledgeable point of contact for any questions.

“You can also use a fiscaliste – or a tax-specialist lawyer (avocat). But note that for business tax returns (liasse fiscale) based on bookkeeping, only expert comptables can advise you, not tax lawyers.

“If your French is very good, you can call the tax helpline on 0809 401 401.

“Or if you have a fluent friend who can go with you, you can also make an appointment at your local tax office (centre des impôts) with an adviser who can explain how to fill in the form and answer any questions about it.

“But in both cases, they cannot give financial advice and can only answer questions about the form.

“There are some translators and other non-registered professionals who will offer to help you fill in your tax return, and I have seen people landed with some hefty tax bills, fines and even jail because of poor advice. If anyone offers to help you with your tax return, check that they are either a lawyer or an accountant registered HERE

“You can also use that form to find a qualified local accountant, or Google ‘Expert-comptables English-speaking’ to find bilingual accountants. But do double-check they are registered at the website above before using them.

“If someone is offering you accounting services and they aren’t registered on that site, then there’s also a link to report them to the authorities.”

Faten Amamou is a Chartered Accountant in France at ESCEC International and member of the Institute of chartered accountants in France (ordre des experts-comptables). Fluent in English, French and Arabic she provides accounting services to both individuals and businesses, and specialises in helping foreign entrepreneurs set up their business and careers in France. Find out more here.

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