Am I being overcharged on savings in France?
A reader writes about income tax demands on interest
The French income tax declaration deadlines are in May and June
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Reader question: On recent French income tax demands I notice that interest from savings (declared in box 2TR) has attracted 12.8% income tax plus 7.5% social tax. My wife and I have registered S1 health forms. A tax adviser says I am being overcharged. What is the correct level?
The advisor appears to be incorrect.
If you have a registered S1 form, you are eligible for all investment incomes (interest, dividends, capital gains…) to be charged at 7.5% of social charges, which represents a single charge called Prélèvement de Solidarité.
Read more: can I open a French bank account as a non-resident?
You should be exempt from the main CSG and CRDS social charges, which otherwise make up respectively 9.2% and 0.5%.
It sounds as if you are already paying the reduced rate of social charges, which should usually be claimed by selecting box 8SH (or 8SI for second declarant).
This should not be confused with the exemption that exists on foreign pension income for people with S1s, which cancels French social charges on these.
Concerning your 12.8% income tax, this represents the ‘flat tax’ rate on savings income.
It is possible your adviser was referring to this.
If so, your overall situation might be such that you would pay less income tax by opting in future for the ordinary tax bands to be applied to this income instead, by selecting box 2OP.
