How To Simplify Your Taxes In France

Isn’t it strange that you never hear people talking about how easy it is to file tax returns? Seriously, no one enjoys filling out forms or calculating their write-offs and when you are trying to navigate another country’s tax system, it gets a lot more infuriating.

But it doesn’t have to be this way.

As the deadline for filing draws ever closer (17th May for paper submissions and 23rd May- 6th June if filing online), let’s go through how to simplify your taxes in France; in other words, let’s make tax, less taxing.

We’ll let you know which forms to complete and some of the main deductibles and tax credits that may apply to you.

What forms will I need?

Unfortunately, there is no single tax return form for personal income tax but several different ones for supplementary income (to download them, visit the French Tax Authority). However, keep in mind that you are unlikely to need all of these and it’s highly likely that you will only need to fill out a page or two on each form.

• Form 2042 - Main form

• Form 2042C - 'Complementary' income

• Form 2031 - Furnished property rental income

• Form 2044 - Non-Furnished property rental income

• Form 2042 - BNC Business Income

• Form 2048 - Capital gains on real estate

• Form 2031 - BIC Business Income

• Form 2047 - Income from abroad

• Form 3916 - Declaration Accounts held abroad

Corporate Income Tax

This applies to people running a business in France, who are responsible for paying taxes on the profits made by their company.

Good News: If your business makes over €75,000 profit, your tax bill will be coming down from 33.33% to 28% by 2019.

Deductibles/ Tax Credits

• Green Tourism Vehicles (Coaches, Buses, Rental Cars): If you’ve invested in an eco-friendly vehicle which is classified as least polluting by the French Government, you can claim up to €30,000 in depreciation deductions.

• Young and Innovative Company: If your business is considered to be young and innovative, then you can claim it as a tax deduction until the end of 2019.

• VAT on petrol: If you’re driving a lot for work, you’ll be pleased to know that you can claim back the VAT on petrol (which is set to increase over the next  five years)

• Employees: Thanks to the Competitiveness and Employment Tax Credit, you can claim back up to 7% of the money you paid out in wages.

• Arts and heritage restoration: If you work in the restoration field, then you may be able to claim up to 50% of your costs back.

• Video Games: If you create video games, then you may be able to claim 30% tax relief based on expenditure (up to €6million per year).

• Furnished Lettings: Whether you are a landlord of a rental property or you let out rooms for holiday makers, you are allowed to deduct a flat 50% from your gross rent for expenses.

• Furnished Housing: If you let furnished accommodation to students, the elderly, or the disabled

• Renovation of Tourist Residences: If you are making renovations to your tourist lets which are designed to improve the energy efficiency (insulation, heaters) or make it accessible for people with disabilities (ramps, hand rails).

Personal Income Tax

These are completed by individuals but can be filed jointly by those who are married or in a civil partnership. Income tax in France becomes payable once your earnings exceed €9,710.

Deductibles/ Tax Credits

• Heating: If you work from home, you could qualify for tax relief on insulating your house and replacing heating appliances (i.e. boilers, radiators).

• Rental Losses: If you make a loss on rental properties, you can write it off your taxes (up to €10,700 per year)

• Child Support (for children under 18)

• Employee social security contributions

• Losses from business or professional activity

Of course, this is an incredibly hard process for anyone to do, especially if they still have the responsibility of running an actual business. If you’re pressed for time, or want a professional to ensure that the taxes are filed correctly, hire an English-speaking French accountant.