Tax season is approaching, and with it come significant updates for French taxpayers. February 2025 brings new deadlines and potential reforms aimed at simplifying the tax declaration process and alleviating the financial burden on low-income households.
The French tax calendar has seen recent updates, with two key deadlines set for February 17, 2025. On this date, taxpayers will face the second installment for all monthly taxes, which can include property and residence taxes, as well as the 'Cotisation foncière des entreprises' (CFE). For those enrolled in monthly payment plans, the payment schedule should be available on their latest tax notice or through their personal space on the tax website.
Then there’s the scheduled eighth payment of the source tax for those with non-salaried incomes, such as self-employed individuals, professionals, craftsmen, and landlords. The latter are also included among taxpayers who receive rental income, as well as those dependent on foreign sources of revenue. Importantly, these groups can choose to switch to quarterly payments before the September 30 cutoff, ensuring they have the flexibility required to manage their financial obligations.
Recently, the French Parliament's finance committee adopted a law on January 29, 2025, aimed at excluding overtime hours from the calculation of the 'revenu fiscal de référence' (RFR) which determines eligibility for certain social aids. This proposal, championed by Corentin Le Fur of the Republican party, intends to prevent individuals from losing out on financial support due to income spikes from additional working hours. Le Fur stated, “Travailler plus ne doit pas rimer avec payer plus,” arguing for the need to maintain financial assistance for modest-income families.
This legislative move has garnered criticism from left-leaning political groups who view it as undermining fundamental social progress, particularly concerning work-time reduction gains. They fear it may disproportionately benefit higher earners who are more inclined to work overtime. The complete draft of this proposal is expected to be presented to the National Assembly for its first reading on February 6, 2025, stirring anticipation and debate across the political spectrum.
Meanwhile, the annual income declaration remains mandatory for all households, even with the introduction of source tax payments back in 2019. For 2025, the declaration window opens on April 13, allowing taxpayers ample time to report income earned during the previous year.
Taxpayers filing paper declarations must complete them by May 22, 2025, whereas those opting for online reporting have staggered deadlines based on their department of residence. Residents of departments 01 to 19 need to report by May 25, 2025, whereas those from departments 20 to 54 have until June 1, 2025, and residents of departments 55 to 976 until June 8, 2025.
Reporting requirements include all professional income, pension payments, unemployment benefits, and daily allowances. It is also important to include any income generated from real estate or capital investments. Taxpayers with specific situations may be required to fill out additional forms, such as the form n° 2042 C, which details various tax advantages from laws like the Girardin or Pinel schemes.
Understanding one’s tax rate hinges on the calculation of the 'quotient familial,' derived by dividing the net taxable income by the number of fiscal units within the household. This calculation then determines how much tax applies via the progressive income tax table, which features five different tax brackets, each with its own rate.
For 2025, with potential risks of confusion and complications around taxes, utilizing tools such as tax simulators can ease the burden for many households. For example, Inter Invest offers simulators to help taxpayers estimate their tax obligations and identify possible reductions for the following year.
Overall, as these updates impact taxpayers across France, staying informed and proactive about impending tax requirements will be beneficial. The combination of revised deadlines and proposed legislative changes may significantly reshape the financial responsibilities of millions, making it imperative for individuals to navigate these developments with care.