Since 2019 for many French nationals, the annual burden of making a tax declaration has become a thing of the past, due to the introduction of deduction at source on salaried and pension income, called 'prélèvement à la source'.
The changes mean that for around 12 million French households their income each year is now reported directly to the tax authority by their employer, pension provider or bank/financial institution. Many of these households no longer even need to make a tax declaration; they simply verify the information recorded by the tax authority in a 'déclaration automatique'.
However, unless they are a salaried employee in France or they are in receipt of a French pension, international households are less affected by the changes as there is no deduction at source for foreign income, business or rental income. That said, if you have previously submitted a French tax return and paid income tax, there will normally be tax paid on account.
Even though you may be below the threshold for payment of income tax, you are obliged to submit an income tax return.
Similarly, if you only moved to France in 2021, you are still required to submit a return for the period you have been resident. The same applies for those who left France in the year.
Non-residents with French source income also need to submit a tax return.
Those who rent property through a digital platform, such as AirBnB, need to be aware that these platforms are required to advise the tax authority of rental income received by their customers.
The all-seeing eye of the French tax authority and the varied basis on which different types of income are taxed means that there are a number of forms to complete, not made easier by the often arcane language used. International property owners normally need to complete at least three of them, often more.
The forms are:
Form 2042 – Declaration des Revenus - The main form, with several annexes shown below.
Form 2042C – Revenu complémentaire - A diverse form to state investment income, capital gains, and foreign salary or pension income.
Form 2042C Pro – Revenu Complementaire Professions Non-Salariées - This form records business income, as well as income from furnished lettings. Business owners using the régime réel are also obliged to report separately their results by the use of Form 2031 for BIC earnings and Form 2035 for BNC earnings.
Form 2042 RICI - Réductions d'impôt /Crédits d'impôt -The form is used if you have an entitlement to a reduction in tax, or a tax credit.
Form 2044 - Déclaration des revenus fonciers - The form is used for the declaration of income from unfurnished accommodation, but only if you have adopted the régime réel form of taxation.
Form 2047 - Revenus encaissés à l'étranger - Used to declare all income banked abroad by a resident of France but also foreign sourced income received in France, with the guidance stating: 'Si vous êtes domicilié en France et si vous avez perçu des revenus de source étrangère ou encaissé des revenus à l'étranger, vous devez remplir une déclaration 2047.'
Form 3916 - Déclaration par un résident d'un compte ouvert hors de France - If you hold bank accounts outside of France you are obliged to declare them, even though they may be inactive. Some local offices do not insist on an annual declaration if there is no change, but best to agree any variation with them in writing.
Form 2042 NR - Départ à l'étranger ou retour en France -You must submit this form if you left France in 2020 and received, after your departure, income from French sources.
Arguably the process has become more complicated in the last few years by the requirement to make the declaration on-line, and to have to navigate a platform designed by French tax officials.
Only if this is your first year of making a tax declaration, or you have no access to the internet, or you are otherwise simply unable to accomplish the task are you entitled to make a paper return.
Dates
The dates for on-line returns this year are as follows:
Departments 01 to 19 (zone 1) - 24th May;
Departments 20 to 54 (zone 2) - 31st May;
Departments 55 onwards (zone 3) - 8th June.
If you submit a paper return the date is 31st May.
For non-residents, the date for submission of your on-line tax return is 24th May, but 19th May for a paper return.
If you are either a landlord or a business that is taxed on the basis of the régime réel you have until 30th June to submit the specific declarations that are required. It is the same date for those who use a société civile immobilière (SCI).
Changes 2021/22
Mercifully, this year there are few changes to the forms or the rules that apply.
The income thresholds for each band have been changed, in part due to inflation.
You can also check on the amount of income tax you are likely to pay this year at French Income Tax Payable in 2022.
It is also important to remember the social charges that are payable this year.
One new tax credit that might be of interest many residents is the introduction of a generous tax credit for the first subscription to a newspaper or magazine that offers general or political news and information, whether local, national or international. There is no stipulation that it must be French or published in France.
Completing your Return
Although there are guides available which offer some assistance in completing the declaration, they are generally of limited value, due to the sheer number and complexity of the forms, which cannot be adequately explained in a guide. However, in the coming weeks we will endeavour to provide some further basic guidance.
Local tax officials are able to assist with completion of the form, a route that is particularly useful for those who are unlikely to pay any income tax (over 50% of the population).
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