Reader question: How can I challenge my French tax bill?
Living in France involves paying plenty of taxes, but if you receive a bill that is unusually large, here's how to go about checking it and challenging it if necessary.
Question: I just received my French tax bill and it's roughly four times bigger than in previous years, even though my circumstances haven't changed. Help!
Tax rates in France are generally quite high - overall French residents have the highest tax burden in the EU - but if your bill has suddenly massively increased while your circumstances haven't changed, it could be a mistake.
Income taxes v property taxes
You get two tax bills per years in France - income tax and property tax.
If you are a resident in France you must fill in the annual tax declaration, even if all your income comes from outside France. The deadline for the declaration is May/June (depending on where you live) and bills are sent out in July and August, with payment due from September.
These bills cover tax and social charges on your income.
Bills for property taxes are sent out in the autumn and cover taxe d'habitation and taxe foncière. Taxe foncière is paid by the property owner and taxe d'habitation is paid by the householder. Taxe d'habitation is gradually being phased out and now applies only to second-home owners and high earners.
Property taxes are set at a local level and taxe foncière has been increasing sharply in recent years - your bill may also increase if you have done significant home improvements such as installing a swimming pool.
Income tax
Your annual tax declaration covers all your income (eg pensions, salary, rental income) plus any tax credits that you are entitled to such as family tax credits.
Your total bill is then calculated as the tax you owe on your income, minus any tax that you have already paid (for example for employees who have their taxes deducted at source) and minus any tax credits that you are entitled to.
For most people their bill is slightly different each year depending on exact income and tax credit level, but if your circumstances have stayed largely the same and the bill has suddenly quadrupled, there is likely to be an error somewhere.
Next steps
If you suspect an error, the next step is working out whether it was your mistake or the tax office's, and whether it's your new total that is correct or your previous total (as it's possible that you have been under-paying in previous years).
If your tax affairs are complicated then it's probably best to get a professional to do this, here are some of the things to check first:
READ ALSO: How can I find professional help with my French taxes?
Do you have income outside France? If you have income outside France - eg a pension or rental income in your home country - then you have to declare this to the French tax man but if your home country has a dual taxation agreement with France (and most countries do) then you won't have to pay any tax on it in France.
If your bill has suddenly jumped then it's possible that you're being taxed on this income - either due to a mistake in the tax office or because you did not declare it as revenus de source étrangère (foreign income) on your tax declaration.
Is your bill for taxes or social charges? French tax bills are made up of two things - impots (tax) and charges sociales (social charges eg unemployment insurance and pension contributions).
Certain types of foreign income such as investment income are not taxed, but may have social charges paid. However, social charges are not applicable to a foreign pension, so if charges have been applied to your pension, then this is an error.
Correct declaration
If you realise that you made an error on your tax declaration, then you can correct it and ask for a new tax calculation to be made based on the new information.
If you file your declaration online, you can also correct it online by going to your impots.gouv account and clicking on Accéder à la déclaration en ligne then clicking on corriger.
If you declared on paper you can file a new declaration, stating on the first page that it is a 'correct and replace' declaration.
Tax office
If you can't work out where the error is, or you're pretty sure that it's the tax office at fault, you can visit and ask for help - even quite small French towns have a tax office that is open to the public.
The first step is to find your local tax office - Google 'Centre des Finances Publique' plus the name of your commune, and up should come the address of your local office.
It's best to check in advance, because officials can only help those in the area covered by a particular office, so they will just have to send you elsewhere if you turn up at the wrong centre.
Most centres don't require an appointment, so just go in and ask for help - it's a good idea to take all relevant documentation with you, and certainly a printout of the tax you received and your most recent tax declaration.
To the surprise of foreigners who might be used to dealing with HMRC or the IRS, French tax office employees are not only accessible, they are also by and large friendly and helpful and will be happy to look over your declaration and explain the reasons for your bill.
If it seems that your bill is an error, you can request a recalculation, and if you visit the tax office the official will help you fill in the form and lodge the request.
Fines
If your tax affairs are not in order, it's also possible that you could be fined by the tax office.
The most common reasons for fines levied on foreigners in France are;
Missing the declaration deadline - deadlines for the tax declaration are in May or June depending where you live, and if you miss the deadline you are liable for late fees, which increase as time goes on.
The French tax calendar for 2022
Not completing the declaration - if you are a resident in France you must complete the annual declaration - even if you are a salaried employee who has already had their tax deducted at source, or if you have no income in France (eg you live on a pension paid from your home country). In many circumstances you won't have to pay any tax in France, but you still need to fill in the declaration.
If you are a British second-home owner who has obtained the post-Brexit carte de séjour (sometimes known as the WARP card or TUE Article 50) you are considered a resident by French authorities and must make the declaration - full details here.
If you fail to complete the declaration and ignore all reminders, French tax authorities do have the power to make an estimated tax bill and send that to you.
Not declaring foreign bank accounts - if you have accounts outside of France, which many foreigners do, you must declare these on your tax declaration, even if the accounts are dormant or only have tiny amounts in them.
This also applies to any foreign investment schemes you have, such as life insurance policies.
The penalty for not listing accounts is between €1,500 and €10,000 and that applies for each account you fail to declare.
Please note, this article constitutes general advice only - for individual tax questions it is best to seek professional help.
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Question: I just received my French tax bill and it's roughly four times bigger than in previous years, even though my circumstances haven't changed. Help!
Tax rates in France are generally quite high - overall French residents have the highest tax burden in the EU - but if your bill has suddenly massively increased while your circumstances haven't changed, it could be a mistake.
Income taxes v property taxes
You get two tax bills per years in France - income tax and property tax.
If you are a resident in France you must fill in the annual tax declaration, even if all your income comes from outside France. The deadline for the declaration is May/June (depending on where you live) and bills are sent out in July and August, with payment due from September.
These bills cover tax and social charges on your income.
Bills for property taxes are sent out in the autumn and cover taxe d'habitation and taxe foncière. Taxe foncière is paid by the property owner and taxe d'habitation is paid by the householder. Taxe d'habitation is gradually being phased out and now applies only to second-home owners and high earners.
Property taxes are set at a local level and taxe foncière has been increasing sharply in recent years - your bill may also increase if you have done significant home improvements such as installing a swimming pool.
Income tax
Your annual tax declaration covers all your income (eg pensions, salary, rental income) plus any tax credits that you are entitled to such as family tax credits.
Your total bill is then calculated as the tax you owe on your income, minus any tax that you have already paid (for example for employees who have their taxes deducted at source) and minus any tax credits that you are entitled to.
For most people their bill is slightly different each year depending on exact income and tax credit level, but if your circumstances have stayed largely the same and the bill has suddenly quadrupled, there is likely to be an error somewhere.
Next steps
If you suspect an error, the next step is working out whether it was your mistake or the tax office's, and whether it's your new total that is correct or your previous total (as it's possible that you have been under-paying in previous years).
If your tax affairs are complicated then it's probably best to get a professional to do this, here are some of the things to check first:
READ ALSO: How can I find professional help with my French taxes?
Do you have income outside France? If you have income outside France - eg a pension or rental income in your home country - then you have to declare this to the French tax man but if your home country has a dual taxation agreement with France (and most countries do) then you won't have to pay any tax on it in France.
If your bill has suddenly jumped then it's possible that you're being taxed on this income - either due to a mistake in the tax office or because you did not declare it as revenus de source étrangère (foreign income) on your tax declaration.
Is your bill for taxes or social charges? French tax bills are made up of two things - impots (tax) and charges sociales (social charges eg unemployment insurance and pension contributions).
Certain types of foreign income such as investment income are not taxed, but may have social charges paid. However, social charges are not applicable to a foreign pension, so if charges have been applied to your pension, then this is an error.
Correct declaration
If you realise that you made an error on your tax declaration, then you can correct it and ask for a new tax calculation to be made based on the new information.
If you file your declaration online, you can also correct it online by going to your impots.gouv account and clicking on Accéder à la déclaration en ligne then clicking on corriger.
If you declared on paper you can file a new declaration, stating on the first page that it is a 'correct and replace' declaration.
Tax office
If you can't work out where the error is, or you're pretty sure that it's the tax office at fault, you can visit and ask for help - even quite small French towns have a tax office that is open to the public.
The first step is to find your local tax office - Google 'Centre des Finances Publique' plus the name of your commune, and up should come the address of your local office.
It's best to check in advance, because officials can only help those in the area covered by a particular office, so they will just have to send you elsewhere if you turn up at the wrong centre.
Most centres don't require an appointment, so just go in and ask for help - it's a good idea to take all relevant documentation with you, and certainly a printout of the tax you received and your most recent tax declaration.
To the surprise of foreigners who might be used to dealing with HMRC or the IRS, French tax office employees are not only accessible, they are also by and large friendly and helpful and will be happy to look over your declaration and explain the reasons for your bill.
If it seems that your bill is an error, you can request a recalculation, and if you visit the tax office the official will help you fill in the form and lodge the request.
Fines
If your tax affairs are not in order, it's also possible that you could be fined by the tax office.
The most common reasons for fines levied on foreigners in France are;
Missing the declaration deadline - deadlines for the tax declaration are in May or June depending where you live, and if you miss the deadline you are liable for late fees, which increase as time goes on.
The French tax calendar for 2022
Not completing the declaration - if you are a resident in France you must complete the annual declaration - even if you are a salaried employee who has already had their tax deducted at source, or if you have no income in France (eg you live on a pension paid from your home country). In many circumstances you won't have to pay any tax in France, but you still need to fill in the declaration.
If you are a British second-home owner who has obtained the post-Brexit carte de séjour (sometimes known as the WARP card or TUE Article 50) you are considered a resident by French authorities and must make the declaration - full details here.
If you fail to complete the declaration and ignore all reminders, French tax authorities do have the power to make an estimated tax bill and send that to you.
Not declaring foreign bank accounts - if you have accounts outside of France, which many foreigners do, you must declare these on your tax declaration, even if the accounts are dormant or only have tiny amounts in them.
This also applies to any foreign investment schemes you have, such as life insurance policies.
The penalty for not listing accounts is between €1,500 and €10,000 and that applies for each account you fail to declare.
Please note, this article constitutes general advice only - for individual tax questions it is best to seek professional help.
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