As the 2013
Avis have been dropping through the letterboxes of France, there has emerged a
trend of higher income tax and prélévements sociaux liabilities being charged
on income declared for 2012.
Firstly,
many of the Tax Offices have been applying the treaty exemptions on Government
Service pensions and UK rental income incorrectly or, in some cases, not at
all, charging income tax and CSG/CRDS, when in fact none is due on these
sources of income.
Secondly,
whilst the correct income tax treaty exemptions may have been implemented, the
Tax Office has charged the prélévement sociaux (CSG/CRDS) in error.
Thirdly, it
seems many Tax Offices from Brittany to Cote d’Azur, for 2013 have changed the
way in which they calculate the French income tax due on non-treaty exempt
income eg the National Insurance retirement pension, other employer pensions
and investment income. Many expats have
received a 2013 tax bill which is far in excess of previous years’ tax bills –
sometimes as much as 50-60% higher. This
type of increase has come about because it was realised by the tax authorities that
the treaty exempt income, whilst not actually bearing any French tax payable by
the individual taxpayer, nevertheless should be taken into account in
determining the marginal rate of tax on the rest of the taxpayer’s income. This means the French tax actually levied on
all their other income is pushed up into the next tax band. The calculations for 2013 now take the treaty
exempt amounts of income into account, resulting in more tax payable by the
individual taxpayer.
If your
Avis shows a much higher liability than last year, it could be due to any (or
all!) of the above factors. If you require us to review your Avis, then
please contact us on email at ppeterson@petersonsims.com or gsims@petersonsims.com We offer a fixed fee service and will provide a written quote for tax
services.
Tel:
05.33.52.09.33