Residents in France might receive a bonus into their bank account from the French taxman next week, but you’d be wise not to spend it all at once. We explain all.
What’s the bonus?
The “bonus” that you might receive in your bank accounts next week is actually a tax credit and is linked to the long-awaited government income tax reform which will see salaries taxed at the source for the first time this year.
Those who didn’t hand over their bank details to the tax man will be sent a cheque.
Explain more pleaseMany taxpayers in France receive tax credits for various reasons, whether linked to the cost of childcare, making environmentally friendly renovations to their homes, employing cleaners or home carers or making donations to charities. Up until now these credits are included in the annual tax declarations which the tax man takes into account before sending out the final tax bill. But under the new income tax plan the government plans to pay out advances to those eligible for credits in January 2019. The credits paid out are based on your 2018 tax declaration for the year 2017. So if you only employed your cleaner or began paying childcare in 2018 you’ll have to declare it in your May tax declaration. In this case you won’t receive any advance on your tax credits, but will have them paid in a lump sum later in the year. So those eligible taxpayers will actually get money into their account – roughly the equivalent of 60 percent of the tax credit. The rest will be paid in later in the year after your 2019 tax declaration has been sent off and studied. In all some 8.8 million households in France will benefit from the advance on their tax credits which will total around €5.5 billion. Note that the advances are based on tax credits for charitable donations, money spent on childcare, employing cleaners or gardeners or dependency costs in retirement or care homes, donating money to trade unions or for investments made in rental property. The advance does include tax credits for eco-friendly home renovations you may have carried out last year as these will be paid out later in the year. So how much could I get? Obviously it all depends on your personal situation and the level of tax credits you receive. According to France’s finance ministry at Bercy the average amount paid out to tax payers will be €627. The money should appear in your bank from the source: CREDIMPOT ALASOURCE and it will appear on January 15th. So why can’t I just spend it? Basically because the amount on tax credits transferred to your bank account may actually be too much. Remember the figure is based on your financial earnings and spends in 2017 that were declared in your 2018 tax declaration. Maybe your situation has changed and come May, when you fill out out tax declaration, it turns out you stopped giving money to charity and no longer spend it on child care. In which case if the government has paid you too much in January 2019 then you’ll have to pay it back at a later date.
The Local (France)