E n online or on paper, it is time to declare your income but also to prepare for effective withholding tax on January 1, 2019. Here, with the site economie.gouv.fr, all you need to know about this new tax collection method …
The entry into force of the withholding tax on income tax is fixed on January 1, 2019. It should be recalled that the withholding tax on income tax is intended to adjust the recovery of tax on income tax. a year to the actual situation of the user for the same year, without modifying the calculation rules. With the site economie.gouv.fr Here’s all you need to know about this topic in six questions and answers …
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1. Why such a method of tax collection?
To adapt to the lives of taxpayers. Today, the income tax is, in principle, paid in the year following that of the collection of income. This discrepancy can lead to cash flow difficulties for taxpayers who experience changes in their income and / or income tax situation: in their personal life, in their professional life, when they are employees or self-employed or when they are landlords. The withholding tax makes it possible to make the payment of the contemporary tax of the collection of the income and to thus avoid a lag of one year. This is also what differentiates it from the simple monthlyization of the tax.
Better distribute the tax in the year. Today, even in a stable situation, the payment of the tax is irregular. It is settled on ten months of January to October in case of monthlyization, or by provisional third in February and May with a balance in September. Tomorrow, the tax will be collected at the same time as the corresponding income. For employees or pensioners who receive income every month, the tax will now be spread over 12 months and it will adjust immediately and automatically to the amount of income earned.
2. When and how?
Whether you are employed or self-employed, or even if you have property income, you will be able to adapt your tax to your financial and family changes as they occur. For employees or retirees who earn income each month, the tax will now be spread over twelve months. As of January 1, 2019, the tax will immediately and automatically adjust to the amount of this income.
How will it be for employees and retirees?
In the spring of 2018, I will report my 2017 income. Based on my return, the tax authority will calculate the deduction rate that will be applied to my income. If I declare my income online, I will immediately have my tax rate applicable on January 1, 2019. Couples may, from April 2018, opt for differentiated rates. Employees who wish it will be able to opt for the non-personalized rate.
I will also receive my tax rate on my tax notice sent in the summer of 2018 and I will be able to opt for the individualized or non-personalized rate until September 2018.
The tax authorities will then send my employer (or other income contributors such as pension funds) the deduction rate.
If my employer provides the prefiguration of the withholding tax, I will be able to know as of September / October 2018 the indicative amount of the deduction that will be made on my salary from January 2019.
From the first income paid in 2019, this deduction rate will be applied to the salary: the deduction at source will be automatic, and will appear clearly on my pay slip. The withdrawal rate will be updated in September 2019 to reflect any changes that may occur as a result of my 2018 income tax return in the spring of 2019.
In the event of a change of circumstances leading to a foreseeable variation of the significant tax, the taxpayer may, if he wishes, request an update during the year of the withholding tax rate. The site impots.gouv.fr will allow each taxpayer to simulate the possibility of modulation and to validate the request with the tax authorities.
How will this happen for the self-employed and the lessors?
The self-employed and the beneficiaries of property income will pay their income tax via installments calculated by the administration on the basis of the declaration of income and collected monthly or quarterly. These installments will therefore correspond to the levies currently charged to them, subject, for monthly installments, to a spread over twelve months and not ten.
In the event of a significant change in income, these advances may be discounted at the initiative of the taxpayer during the year, under the same conditions as the withholding tax applicable to income paid by a third party. These deposits will be automatically deducted by the tax authorities for the sake of simplicity for taxpayers.
The lag of one year is therefore removed. For example, in the event of a fall in the price of agricultural products or cessation of activity, farmers will see their taxes adjust earlier than in the current system. It will be the same for the lessor owner in case of stopping the rental or unpaid.
3. What confidentiality?
A levy rate is not indicative of a specific situation, nevertheless, to guarantee the confidentiality of the income in particular situations, the option of an “individualized” or “non-personalized” sampling rate is proposed in place and place of the normal rate (ie the personalized rate of the tax household).
The employee will not give any information to his employer. The tax administration will remain the interlocutor of the taxpayer:
It will calculate the rate of the levy and will communicate it to the third party paying the income (private or public employers, pension funds, etc.).
It will be the sole addressee of any requests for tax rate modulation expressed by taxpayers.
She will receive tax returns from taxpayers, as is the case today.
It will calculate the final amount of the tax.
She will receive the payment of the balance of tax or proceed to the refund of any overpayment.
The only information sent to the collector will be the sampling rate which reveals no specific information. The withholding tax rate for each taxpayer will be subject to professional secrecy. Persons who willfully breach the obligation of professional secrecy may be punished.
A levy rate and two options
The rate of levy will be the household rate. It is calculated on the basis of the latest income tax return. This is the one the administration will send to your employer. If you wish, you can choose an individual rate for each of the two members of the household if you are married or pacsés, or opt for a “non personalized” rate to be applied directly to you.
4. What date?
2018 is the year of transition. The income tax will be deducted each year: in 2018 on the revenues of 2017, in 2019 on the revenues of 2019. Return on the year of transition which concerns the 2018 incomes.
Maintaining reductions and tax credits. At the same time, the benefit of the reductions and tax credits acquired for 2018 will be maintained. The tax benefits given in the form of an allowance will be automatically included in the rate, in particular the 10% for business expenses. Deduction of child support will also be taken into account.
The 2018 tax cuts and credits will be maintained and will be paid in full at the time of the tax balance at the end of the summer of 2019. For home and child care, A tax credit installment is expected starting in the first quarter of 2019. It will be equal to 30% of the tax credit of the previous year. The balance will be paid in August 2019, after the declaration of income which remains unchanged and which will make it possible to declare the amount of expenses incurred in 2018 giving right to the tax credit.
Absence of double deduction on wages in 2019. There will be no double deduction in 2019 on wages, pensions, replacement income, self-employed income and recurrent property income. The tax normally due for non-exceptional income received in 2018 will be canceled through a specific tax credit calculated automatically by the tax authorities on the basis of the 2018 income tax return filed in the spring of 2019. The The tax on the fraction of the income of the directors and the independents of 2018 which exceeds those collected during the three preceding years will not be erased, except if the remuneration of 2019 finally exceeds that received in 2018.
Taxation of exceptional income received in 2018. Exceptional income and other income excluded from the scope of the reform, such as capital gains and real estate, interest, dividends, gains on stock options or free shares will continue to be taxed in 2019, in the usual manner. . Taxpayers will not be able to take advantage of the year 2018 to sell tax free shares or real estate. Finally, to avoid abuses, the law will provide special provisions so that taxpayers who are able to do so can not artificially increase their revenues in the year 2018.
5. How does it work for the taxpayer?
Withholding tax will cover the vast majority of income: salaries and wages, pensions, replacement income (including unemployment benefits), self-employment income and property income. Whether you are employed or self-employed, active or retired, this method of income collection concerns you.
S employees – Retired. For salaries, wages, retirement pensions and replacement income, the tax will be deducted at source by the third party paying the income (employer, pension fund, individual employer, etc.), based on a calculated rate and transmitted by the tax authorities.
Independent – donors. For the income of the self-employed and the property income, the tax on the incomes of the current year will be the subject of installments calculated by the administration and paid monthly or quarterly.
6. How does it work for the collector?
The Directorate General of Public Finance (DGFiP) will send you by dematerialized the rate of levy to apply to income subject to withholding tax. You will retain the corresponding amount and then return the following month for a month (or quarter for small businesses) to the tax authorities.
For companies, associations … Simplified implementation thanks to the Nominative Social Declaration (DSN). The tax authority will calculate the tax rate and will remain responsible for collecting the income tax. The companies will receive by the same computer system as the one by which they transmit the nominal social declaration (DSN), the rate of deduction to be applied to the salary.
For administrations. Public employers will enter the field of the DSN after 2019. The conditions for exchanges concerning withholding tax will then be the same as those of other employers in DSN. During the transitional period (in 2019), these employers must collect and remit the withholding tax. They will have to file a specific declaration every month, the Pasrau declaration which will serve as a declaration of the nominal collection of the withholding tax, a tool for its transfer to the tax administration and will allow the DGFiP to send the tax rates. at the source, inspired by the logic of the DSN. It will be filed by the collector who will mention every month including his Siret and his name, and for each user to whom he pays income. This declaration will be supplemented by a part relating to the payment, bearing the amount to be withdrawn from the collector’s bank account and the bank details of this account, on which the DGFiP will take the month M + 1 the amount of withholding tax effected on month M. It will be sent monthly by the collector. On the basis of these declarations, the DGFiP will in turn send the levy rates, in a manner similar to that of the DSN. When these collectors enter the scope of the DSN, they will use the latter in place of the Pasrau declaration.
For pension funds and other payers of pensions, pensions … As well as non-DSN employers during the transitional period, these collectors will have to file a Pasrau declaration each month, with the individual amounts taken, the rates applied and the amount to be paid. This declaration will be the same as that provided for employers who will not switch to DSN until after 2019. It will be filed by the collector. This declaration will be completed by a part dedicated to the payment bearing the amount to be taken from the bank account of the collector and the bank details of this account, on which the DGFiP will take the month M + 1 the amount of deduction at source made the month M. It will be sent monthly by the collector. The tax authorities will in turn send the levy rates.
What does not change
The reform does not change the rules for calculating taxes; the amount due in respect of a year will therefore not change:
– The income tax schedule is not changed; it will remain particularly progressive.
– It will always take into account all the income received by the household.
– The familyization and conjugalisation of the tax will be preserved.
– The deduction of reductions or the granting of tax credits will be maintained.
– The citizen gesture of the tax return as well as the tax notice will be maintained.