Can mystery €200 rebate be French tax rebate?

We cannot be certain without seeing your tax assessment but here are some possible explanations.

It may be linked to the change in France this year to “at source” income tax which began for 2019 income.

This is combined with a tax credit to annul income tax on many kinds of income for the tax year 2018. This is because for all years of income up to and including income of 2017, income earned was taxed in the following year. Under the former system, 2018 income should also be taxed in 2019, so a tax credit has been raised to stop this as France changes to “at source” tax.

Previously, people would start paying instalments of tax for the previous year based on what they had declared the year before. Then, after they made their declaration in spring, their tax assessment was issued in August/September showing the balance of tax and social charges – or any refunds – due.

From January 1, 2019, the new system is to pay tax monthly, on-account, on the income to be taxed in the same year.

In 2020, tax declarations will be submitted in April/May as usual but when tax assessments are issued in August/September, the bulk of the tax on 2019 income will already have been collected.

Due to the change, many forms of income in 2018 were written off as far as tax is concerned and people should not have paid instalments for tax on this 2018 income in 2019.

Most people have not paid any tax or social charges during 2019 for 2018 income. However, some people were incorrectly asked for, and paid, an instalment of tax on 2018 income in the early part of 2019 so your refund might relate to this.

In this change-over year, the government also decided that people should not lose the benefit of any tax credits they would have been entitled to on 2018 income, related to expenses such as employing people in the home under the Cesu system.

Based on the assumption that such expenses would have been similar to those incurred in 2017, the tax office made a payment of 60% of this “tax credit” money in January.

The refund you have just received could have been a final balancing amount now your real 2018 incomes are known to the tax office after your declaration in May/June this year.

Reader's query answered byHugh MacDonald

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