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French banks are going to hike their charges once again

From January 1st 2017 anyone with a bank account in France can expect to pay a fair bit more for the pleasure of using it.

Published: 7 December 2016 17:00 CET

French banks are going to hike their charges once again

Photo: AFP

A new survey has revealed most banks will seriously hike their service charges, just as they did in 2016.

The study, carried out by bank comparator “Meilleurebank”, revealed most banks in France will raise their charges for “maintenance” of accounts.

These charges are set to rise by an average of 13 percent on January 1st.

Other charges such as when using debit cards in the cash machines of other banks will also go up by an average of 4.5 percent.

And the charges just for having the debit card itself will also rise by around 3 percent.

The hikes are put down to the fact that low interest rates on loans and mortgages means French banks need to find an alternative way to boost their profit margins.

Americans and British who move to France are often shocked that French banks impose charges for “account maintenance” and for having a debit card, because they often don’t exist back home.

This is taken from an article written for The Local called: Five tips for opening a bank account in France.

“While many banks in the US and UK have free checking, that concept does not really exist in France, especially since you're required to interact so often with your personal banker and can't complete all of your transactions online. You may pay a small fee for 'tenue de compte', or keeping the account open, as well as a monthly fee for your debit card.

“The debit card fee will depend on the options you choose: the weekly and monthly limits for cash withdrawal and debit transactions, the amount of insurance protection on the card, overdraft protection, and your choice between 'débit immédiat' – when your account is debited immediately for purchases, and 'débit différé', when your card is debited at the end of your month. You can choose between the basic cards with low limits, or gold and platinum visas that often offer perks like travel insurance.”

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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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