These are the French tax breaks you need to know about
It’s tax declaration season in France and with just a few weeks to go until the deadline, here is everything you need to know about how to pay less tax.
In France, there are a number of ways to reduce your tax bill, if you employ a cleaner at home for example or your children are in childcare.
So, before sending in your tax form over the next few weeks, it's a good idea to make sure you know about all the different tax breaks available.
There are three types of tax breaks. A tax deduction (called abattement fiscal in French), is taken off the total taxable income you declare. The boxes to fill in here are found on the main tax declaration form.
You can apply for a deduction if:
You're in a specific profession (if you are a journalist with a French press card or a qualified childminder, for example).
You have professional costs such as travel to work, equipment, tools, meals and some other work-related expenses. Be careful to keep all your invoices though, as you may need them as proof.
You provide financial or other support for your adult child or another dependent. This is called a pension alimentaire.
Tax reductions and tax credits (which are both taken off your tax once it has been calculated based on your declaration) are declared on another form (n° 4042 RICI).These tax breaks apply under the following circumstances:
Family: If you have children, you are eligible for several tax breaks but you must declare your offspring on the main tax declaration form.
Childcare: If your child was born after December 31st 2010 and goes to a crèche or is looked after by a nanny outside the home, you can get a 50 percent tax credit within a €2,300 limit per child.
For unmarried couples, only the parent who has listed the child on his or her tax form can apply for it. You can also benefit from this tax credit if your child is looked after at home.
Click here for more details.
School: If your child attends a state or private secondary school or was in higher education by December 31st 2017 and does not do any paid work or have a work contract lined up after the end of his or her studies, the following amounts will be reduced from the final tax bill: €61 per child for collège students (the first 4 years of secondary school), €153 euros per child for lycée students (the last 3 years of secondary school) and €183 per child in higher education.
Home: Home improvements in your main residence such as making your home more environmentally friendly or adapting it to the special needs of its inhabitants are others ways of reducing your tax bill.
If you have carried out energy-saving building work such as roof insulation or installing a heat pump in your family home, a tax credit of up to 30 percent is available.
However, the work must be carried out by a professional tradesman. The maximum eligible costs are €8,000 per person or €16,000 for a couple. The type of equipment and other investments that qualify for the CITE tax credit (crédit d’impôt pour la transition énergétique) are very specific so make sure you are aware of the rules.
If you have adapted your home to cater for the needs of an elderly or disabled person such as installing specific toilets and sinks or special lifts, you can benefit from a tax credit of between 25 percent to 40 percent for a maximum sum of €20,000.
The name of this allowance is fairly long-winded, so here goes: “Crédit d’impôt pour certaines dépenses d’équipements de l’habitation principale en faveur de l’aide aux personnes".
Domestic help: Tax credits of up to 50 percent are available if you employ someone - who is not a family member - to help you with household chores within certain ceiling limits, in some cases.
If a person looks after or tutors your children, cares for an elderly or disabled person, helps out with gardening (up to €5,000) or DIY (up to €500) or provides internet and computer assistance (€3,000) within a maximum total limit of €12,000, you can benefit from this allowance.
Remember though, all employees must be registered.
Rental property: If you are a French resident and own a property in France which you let out under certain other conditions, you may get tax credits.
Two laws cover this section: the ‘loi Pinel’ and the ‘loi Duflot’. Both require the properties to be leased out for at least 6 or 9 years.
Donations: If you’ve given money to charity but no more than 20 percent of your total taxable income, a tax reduction of 66 percent of the donation will be shaved off your tax bill.
Financial investments and banking: A number of tax breaks exist for those who have invested in small and medium sized companies (called PMU). If you have a life insurance policy, premiums within a certain limit will not be taxed.
You can download your tax forms here and find out about all the tax breaks available on the government website.
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