Tax office to have extra year to do check-ups

The tax office will have more time to do check ups on people's declarations this time

The tax office will be able to check up on people’s tax affairs for 2018, and potentially issue additional tax demands, for four years to come instead of the usual three.

It will be possible for tax officials to ask taxpayers to correct omissions and errors up until the end of 2022, instead of 2021, in a change which is linked to the special arrangements in place for 2018 income.

Due to the switch to tax-at-source (PAS) in January 2019, most ‘regular’ kinds of income from 2018 are subject to a tax credit called CIMR which will wipe out tax on this income so people are not paying double in 2019. As a result 2018 is being referred to as an année blanche ('no-tax' year).

However certain kinds of income like bank interest or share dividends do not fall under this and still fall to be taxed, as do ‘one-off’ incomes, known as revenus exceptionnels.

These are amounts that you would not normally earn as part of your regular income, as opposed to eg. incomes from pensions or salaried work.

In some cases there can be some tax to pay on self-employment incomes if they are found to have been particularly high in 2018 compared to previous years, as a mechanism to avoid people trying to take advantage of the année blanche (however this does not amount to the income being taxed in full).

Despite the move to PAS, all 2018 income needs to be declared, as usual, this month or next (depending on your department). This year most people are asked to complete their declarations online at impots.gouv.fr

If in future years taxpayers are asked to clarify or rectify matters related to this declaration of 2018 income, notably with regard to any elements that were used to calculate their année blanche tax credit, they will have two months to respond to the request.

Those who do not reply, or do not give an adequate reply, may receive a mise en demeure (formal notice to take action), in which case there is a further 30 days to comply.

If there is still no satisfactory response the CIMR tax credit the household received could be partly or completely annulled and the tax for 2018 could become payable again.

This is an exceptional measure, due to the changeover this year.

For more about this year’s declarations see your helpguide to French Income Tax 2019

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