This information is intended to complement the information in our French Income Tax 2020 helpguide.
This year changes to online declaration sections or equivalent paper forms as compared to last year are relatively minor, but include, for example, some new boxes showing (where relevant) amounts of tax that have already been taken off at source following the introduction of the new PAS (tax-at-source) system last year.
As previously reported, the declaration dates this year have been deferred and, unusually, those declaring by paper have the longest to declare (June 12); which is partly to account for the fact that postal services have been disrupted by the confinement measures and paper forms may arrive later than usual.
The full dates are at this link.
Note that if you live in departments 50 to 54, this year they are in the second zone of three zones for the tax declaration dates, whereas previously they were in the third zone (with the later declaration date).
Currently people with any queries are still asked not to go in person to tax offices due to the complications surrounding the Covid-19 epidemic.
Also due to these disruptions the tax authorities are not able to give precise dates as to when people will receive their avis d’impôt tax statements this year.
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We advise you either read this update in full, or at least consult the section headings for those that apply to you.
Contacting the tax office
The usual tax telephone helpline on 0810 467 687 is currently not offering help with income declaration issues this year – some people have been confused when calling it in recent weeks and not finding anything relevant among the options.
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This year for general tax help by phone you should instead call the following (non-premium rate) number that was formerly only for queries about PAS (tax-at-source): 0809 401 401.
If necessary you can also phone your own tax office with queries, though people are encouraged to make use of the secure private messaging facility in their online space at impots.gouv.fr
The tax services state that they have mobilised extra technical means and staffing in order to cope with increased demand for help at a distance.
‘Automatic’ declaration
Those with simple tax affairs, who made no change to information pre-filled by the tax office last year and whose situation is unchanged this year are being told that ‘to declare, you just have to check’.
The process is being called ‘automatic declaration’.
No declaration is needed if there is nothing to add.
People will be alerted by email or by letter (if they declare by paper), and a document for checking information already known to the tax office this year will be available in their personal space online.
See sample image for an example of what this will look like.
In order to facilitate this system even more information than usual is being pre-filled this year.
This will include, for example, amounts of expenses incurred on home services (a cleaner, gardener or nanny etc) that are eligible for a tax credit via the Cesu or Pajemploi systems.
PAS tax-at-source and modifying your rate
The tax services report that since the start of the Covid-19 epidemic an especially high number of people have exercised the option to adjust the rate of tax-at-source in their online space at impots.gouv.fr.
The ‘flexibility’ of the system, which allows taxation to adjust more quickly to your real situation, has thus really proved its usefulness this year, they say.
They say if you made a modification of your PAS rate due to a drop in income because of Covid-19 for example, or having been temporarily laid off, the new adjusted rate will continue to apply all this year.
In this case your income declaration, which will generate a display of a new rate that would usually apply from the autumn, will in your case not modify actual amounts taken off in the course of 2020 (though there could be balancing amounts required in 2021 if relevant).
Modification of the rate applied to your incomes is undertaken via Gérer mon prélèvement à la source in your personal space.
In the case of instalments deducted from your bank account for certain regular incomes that cannot be directly taxed at source in France, it is possible to request for example that an instalment is deferred – report d’acompte (this is mostly for small business incomes), a reduction via modification of your rate (modulation du taux), or stopping instalments if your income source has ceased due to Covid-19 (arrêt des acomptes).
To be taken into account the following month, modifications of instalments should be undertaken before the 22nd of the month.
New declaration sections relating to PAS
As we state in What’s new this year on page 7 of the income tax guide, you should find that there are some new boxes pre-filled with amounts that you have already paid via tax-at-source or estimated instalments from your bank account.
In the paper forms this is now in section 8 at the end of the main 2042 declaration.
These new boxes are for: tax at source (eg. on French salaries and pensions) 8HV/8IV, instalments of income tax 8HW/8IW, instalments of social charges 8HX/8IX. There are also boxes to show amounts you may already have received in reimbursement of previous over-payment of income tax (8HY/8IY) or social charges (8HZ/8IZ).
There should normally be nothing for you to do here, but if, exceptionally, amounts of tax at source are incorrect you can modify them.
There is also a new box 8EA which should show the amount of any advance you had in January towards tax credits for reasons such as giving money to good causes or employing people in the home.
Foreign ‘tax credit’ income
If you have foreign income that generated a tax credit equal to the French tax that would otherwise be due on these, such as UK rental income or government pensions, then the box for inserting the total amount, 8TK, has moved from the main 2042 declaration to the 2042C complementary declaration, in section eight (Divers).
Income from online ‘platforms’
Income from large online commercial websites for rentals or buying and selling etc should now be communicated to the tax authorities and the websites should have sent you a summary of annual earnings earlier this year. However it is still up to you to check these amounts are inserted correctly.
Professional income
If you have any professional self-employment income declared under the réel systems, including the requirement of a declaration des résultats earlier in the year, as of this year these amounts should now be pre-filled on the main income declaration so you do not have to fill them in twice.
Investment income
In the case of investment income where there is an option for taxation according to the usual bands or under the PFU flat tax rates, the online declaration system is now set up to show you at the end of the declaration whether opting for the ordinary bands is beneficial to you if you did not click to take it up. You can therefore change your mind and opt for this if you wish.
Tax credits for services in the home
The sections for inserting expenses related to services in the home are now on the 2042, section 7, whereas last year they were on the 2042C complementary declaration. The box names have not changed, so this will probably only be relevant if you are declaring on paper.
French and international investment bond withdrawals (including assurance vie gains)
With regard to income to be declared as described on pages 58-59, please note that in cases where French social charges have already been applied at source you should insert (if not already pre-filled) the assessable income amount also in the appropriate box in section 2, 2042 relating to revenus déjà soumis aux prélèvements sociaux (income already subject to social charges) to ensure that social charges are not applied again via the tax bill.
There are several boxes depending on different circumstances, but in many cases where you are opting for taxation under the ordinary bands this will be box 2BH.
Non-residents
The tax authorities state that this year there are improvements to the online declaration system allowing for simpler declaration of your worldwide income if you wish to make use of the option to be taxed on your French taxable income under the ordinary bands taking all income into account.
The tax authorities say that this worldwide income option often allows for lower tax as opposed to the fixed 20% or 30% rate for non-residents, so is worth considering.
If you insert your other (non-French taxable) income for this purpose then the system will automatically apply the tax rate version that gives you lower tax (either by the bands, or the fixed rate).
Tax deductions
Box 6DD for inserting certain amounts deductible from your taxable income has now moved from the main 2042 to the complementary declaration 2042C, section 6, Charges et imputations diverses.
See also section below about new French retirement plans.
New French retirement pension plans (plan d’épargne retraite)
In most cases sums paid into certain new forms of French retirement private pension plans (page 43), available since October 2019, are tax deductible and there are new boxes for inserting these amounts under Charges deductibles (section 6, 2042).
There is a new box on the 2042, at 1AI/1BI for inserting sums taken out of these pension schemes as capital.
There are also new boxes on the 2042C complementary declaration (section 2, revenus des capitaux mobiliers) for declaring amounts linked to cashing in an assurance vie policy that you have held more than eight years in order to reinvest it in one of these plans.
Overtime
As mentioned in What’s new this year, page 7 of the income tax guide, there is a new box, 1GH (1HH for second declarer), for inserting earnings from tax-exempt overtime.
Cryptocurrency
Also as mentioned in What’s new this year, there are, as expected, new requirements for declaration of cryptocurrency accounts held abroad, and for cryptocurrency capital gains and losses.
The form for declaration of accounts held or used in 2019 is 3916-bis; you can also include the same information written out on a piece of paper if declaring by post. The form says any accounts that ‘habitually receive deposits of digital assets’ should be declared.
Capital gains should be calculated on new form/section 2086 and then gains or losses declared on 2042C boxes 3AN (gain) or 3BN (loss). Losses may be offset against similar gains in the same year.
Gains of less than €305 per year are tax exempt but you are still supposed to fill out the 2086.
These gains are subject to the flat tax at 12.8% plus social charges.
Right to be wrong
As part of the droit à l’erreur (rules allowing for flexibility towards those making genuine mistakes), the online declaration now has extra alerts about typical mistakes to watch out for, depending on what sections you choose to complete.
