Taxes and money in France in 2020: what’s new?
There is good news, with lower income tax for millions this year and the end of one of the main local taxes for most residents. Here are some of the key changes in 2020:
- France’s first tax band is being lowered from 14% to 11% from January 1. This will mean an income tax reduction of, on average, €350 a year for around 17million households. It will not benefit people who pay no tax or, due to a mechanism affecting other bands, those with incomes of €72,644-plus a year per family quotient part. You can check your entitlement at tinyurl.com/y3sptrsp.
- As of this year, 80% of households will not pay any taxe d’habitation as one of President Macron’s manifesto promises comes to full effect. This does not apply to second homes. You will still need to pay a TV licence fee, which drops €1 to €138.
- Those who did not have to make changes to their tax declaration (ie. no new sources of income or other changes since their last declaration) will not need to make a declaration at all if they have the same, known, incomes, such as salaries or French pensions. They will receive a short document listing incomes known to the tax office and if they do not make a declaration, this will be taken as being accepted as accurate.
- There is a new right from October to a daily payment for people who make use of the congé de proche aidant to stop work to look after a relative who is ill. It will be €43.52 for a member of a couple, or €52 for single people. It cannot be used for more than three months in total during a person’s career.
- Retired people with French pensions of less than €2,000/month will have their pensions indexed to inflation (for others it will increase by 0.3%). A minimum pension for all those having completed a “full career” will also be in place, at €1,000/month (others can benefit from Aspa pension top-up, which this year rises to €903/month).
- Tax reduction for investing in small businesses that was raised to 25% of the investment in 2018 and 2019 is maintained for another year.
- Impot sur les sociétés corporation tax is lowering. It will remain at 15% for small businesses but will drop to 28% (from 31%) for firms with revenues over €38,120 before tax and 31% (from 33.3%) for revenues of over €2.5million.
- Eighteen “little taxes” that do not bring in a lot to the coffers are ending, ranging from one on driving licences to another on vaping products.
See also:
A new decade begins... what’s new in France in 2020?