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TAXES

French taxman second greediest in world

Confirmation (if any was really needed) that the French taxman is one of the greediest in the world came this week from the OECD. However he wasn't as avaricious as the tax man of one other European country.

Published: 4 December 2015 09:27 CET
French taxman second greediest in world
Photo: AFP

France’s tax revenues rose once again in 2014, meaning the French face the second highest tax burden in the world.

The word tax has of course long been synonymous with France and confirmation of why became clear in the latest OECD study on countries' tax revenues.

The study, which looks at the tax burden of the each of the developed countries in the OECD, showed that France’s tax receipts had risen once again in 2014 by 0.2 percent.

Tax revenues in France now stand at 45.2 percent of the country’s GDP.

However that wasn’t enough to put France top of the table.

The title for the OECD country with highest tax burden in the world goes to Denmark, where tax revenues are worth 50.9 percent of GDP.

After France came Belgium where tax revenues were worth 44.7 percent of GDP in 2014. In Germany the percentage was 36.1 percent – down from 36.5 percent in 2013, the UK was 32.6 percent and the United States was just 26 percent – fourth from the bottom of the table.

The average for the OECD countries is 34.4 percent.

While Germany has a lower tax burden than France, it earns more through income tax and levies on consumption. However the French tax man pulls in more than his German counterpart through taxes on companies and welfare charges.

The study shows that after dips in tax revenues between 2007 and 2009 caused by the financial crisis, the percentage of tax burden has risen again to its highest level since 1965.

France's high tax rates have often been blamed for why so many French seek to head abroad.

A recent study from Les Echos newspaper revealed that in 2013 the number of French tax payers earning over €100,000 a year leaving for abroad rose by 40 percent, with 3,744 individuals heading for the departure gates.
 
That compares to 2,674 in 2012, the year President François Hollande was elected, and 1,330 in 2010.
 
And for the very, very rich who earn over €300,000 each year, the number of nationals quitting France rose by 46 percent from 451 in 2012 to 659 in 2013
 
Les Echos notes that while the exodus of high earners rose by 40 and 46 percent, the increase in the overall number of French going abroad rose by six percent.
 
Another recent study on the migration flows of the world's richest people by New World Health also spelled bad news for France. Over the period of 2000 to 2014 France was ranked third in the world for the number of millionaires (42,000) who left the country.
 
But most studies suggest the French are simply heading abroad for professional rather than tax reasons and that goes for the country's most wealthy too.
 
Speaking to The Local previously, Fabienne Petit director of international activities at French firm Humanis, which works with French expatriates in the area of health cover and insurance, explained it was a myth about wealthy French fleeing the tax man.
 
“It’s a real cliché to say that all French people are going abroad for only fiscal reasons. In fact only 17 percent of people leave for financial reasons, so we need to put an end to this myth,” he said.
 

 

 

 

 

 

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TAXES

What to do if you’re struggling to pay a French tax bill

Income tax bills come due in France from September 26th, while property owners will also be receiving property tax bills in the autumn – but if you’re worried about your ability to pay, options are available.

Published: 12 September 2024 10:30 CEST
What to do if you’re struggling to pay a French tax bill

France is a highly taxed country, so if you live here you probably already accept the fact that you will be paying a lot of tax.

But if you’re struggling to pay the bills, you have options, and in most cases the initial advice is the same – contact your local tax office and ask for help.

Income tax

If you’re registered with the online tax portal and make your declarations online you will have already given your bank details to the tax office and they will take the money out of your account directly (after sending you a bill so you know how much will be going out).

If you owe more than €300, the money will be taken in four instalments – this year the payment dates are September 26th, October 25th, November 25th and December 27th.

Defer payment

If you’re concerned about your financial situation you may request a deferment (a délai de paiement) from tax authorities, giving you more time to pay what you owe. 

If you’re asking for a deferment, you can do so online:

  • Log on to your personal space at impots.gouv.fr, and access “messagerie sécurisée” (secure messaging);
  • Click on “écrire” (write);
  • select “j’ai un problème concernant le paiement de mes impôts” (I have a problem paying my taxes);
  • then “j’ai des difficultés pour payer” (I am having trouble paying);
  • Select the tax concerned and follow the instructions on the form.

If you prefer to deal with the matter face to face, you can visit your nearest tax office.

Whether you are asking online or in-person, you must provide a completed difficultés de paiment form – find that here – plus;

  • your tax demand;
  • a bank statement;
  • supporting documents showing your incomings and outgoings (such as pay slips, rent bills, utility bills, etc).

Be aware that deferment requests are handled on an individual basis.

Write off a bill

In certain cases – if you have recently been made redundant, for example – you may ask for tax relief (known as a remise gracieuse), in which part or all of your bill is written off.

Your request for a remise can be made online, using the secure messaging system mentioned earlier. Alternatively, you can go to your nearest tax office in person.

You should fill out a completed difficultés de paiement (payment difficulties) form, and attach or take along corresponding documents.

  • Tax authorities will take into account, in particular, an unforeseeable loss of income (unemployment, for example);
  • Other exceptional circumstances (such as the death of spouse, separation, disability) or abnormally high expenses (illness);
  • a disproportionate difference between the size of your tax bill and your level of income.

Ability to pay

When you apply for a deferment or relief, your ability to pay is analysed, taking into account, among other things:

  • your assets and the resources of people living with you, whether taxable or not (social benefits, municipal assistance, RSA, etc.);
  • essential household expenses (food, healthcare, insurance, housing, transport to and from work, etc.);
  • whether your expenses match your resources and the composition of your household.

Be aware that, if your expenses exceed your financial capacity solely because of your lifestyle choices, your application will be rejected.

Furthermore, depending on your situation, the granting of tax deferment or relief may be subject to :

  • prior payment of outstanding taxes;
  • the filing of a tax return, if you are not fully up to date with your tax obligations;
  • a waiver of any litigation relating to the taxes concerned by the application.

Usually, requests for deferred payment or tax relief are processed within two months. If you have not received a reply within this period, you should assume your request has been rejected. 

But this period may be extended to four months if your situation is complex. In this case, the administration must inform you of this extension before the initial two-month deadline expires.

Property tax

If you own property in France, autumn is also the time when you will be getting property tax bills (tenants no longer pay property taxes after the phasing out of the taxe d’habitation.

All property owners get a bill for taxe foncière while second-home owners will also get a bill for taxe d’habitation – find a full explanation of the system HERE.

Many people have noticed a steep rise in property tax bills in recent years, due to changes in the tax system. If you think your bill is incorrect, here’s how to challenge it.

If the bill is correct, but you are having difficulty paying you can contact your local tax office as described above to request a deferment of the bill. Property tax can also be paid in monthly instalments, rather than all at once.

There are also some groups who are exempt from paying, or entitled to a reduced rate.

It’s sometimes mentioned that older homeowners in France are exempt from taxe foncière (property owners’ tax). This is wrong, but depending on your situation, assistance in the form of a reduction or an exemption may be possible. 

If you are over 75 years old on January 1st of the tax year, you can benefit from an exemption from property tax for your main residence (not a second home). Two additional conditions must also be met.

Concerning the occupation of the accommodation:

  • you live alone or with your spouse or civil partnership partner;
  • you live with dependents for the calculation of income tax (children, dependent persons).

Concerning your financial resources: 

  • the amount of your reference tax income from the previous year must not exceed a certain ceiling specified by article 1417-I of the General Tax Code, which is set by a decree published each year;
  • The income limits not to be exceeded depend on the number of parts retained for the calculation of income tax;
  • Holders of the solidarity allowance for the elderly (ASPA) or the supplementary disability allowance (ASI) are exempt from the financial resources requirement.

If you are over 65 and under 75 on January 1st of the tax year, you can benefit from an automatic reduction of €100 on property tax on your main residence.

Two additional conditions must also be met:

  • you occupy your accommodation under the conditions listed in the exemption from property tax for persons aged over 75;
  • the amount of your reference tax income from the previous year does not exceed a certain ceiling specified by article 1417-I of the General Tax Code.

Neither of these exemptions can be used for second homes. Since the taxe d’habitation is now only paid by second-home owners the opportunities for a deferment or exemption are very limited, since the tax office assumes that second-home owners are financially stable.

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