This flagship measure in the draft budget 2017 has finally been adopted by the deputies, this Friday evening. The opposition has promised to come back on this text and in case of alternation.
The deputies of the majority have repaired the quack of the day before on the deduction at source of tax on income. This flagship measure, included in the draft budget 2017, could not be adopted due to a lack of presence of sufficient of the elected representatives of the majority. The government had then asked for a second deliberation, which took place this Friday.
The deputies have finally widely adopted the levy at source which must be applied from January 2018. The opposition, which has promised to come back on this measure in the case of alternation, there was represented in the parliament by a single mp, LR, Claudine Schmid, against a thirty the day before.
The reform stipulates that as of January 1, 2018 the tax will be calculated on the income of the current year and not on the income of the previous year. This amount will be paid directly to the wages or retirement pensions. It is, therefore, a third party – the employer or the pension fund – which collects taxes.
Income in 2017 and not charged
The tax administration will calculate the sampling rate according to the income of the previous year. The January 2018 will be communicated to employers or other organizations that collect the tax by the end of 2017. The taxpayer may opt for a neutral rate, or individualized in order that his employer may not be able to “guess”, based on its sampling rate, the level of its other income or those of his spouse.
This rate may be adjusted during the year in the case of the evolution of income (salary increase, retirement, loss of employment, etc.) or change of family situation. As the taxpayers pay in 2017 of the tax on the income of 2016 and in 2018 the tax on the income of 2018, those of 2017 will therefore not be taxed.
The exceptional income and discounts, or tax credits, this “year in white” will be taken into account in 2018, to avoid shortfalls or windfall effects. Meps voted Friday of the amendments to exclude from the scope of these non-recurring revenue, taxable benefits, end of xed-term contracts and temporary assignments.
On the other hand, bonuses of welcome “golden hello” or starting, paid in 2017, will be well considered as non-recurring income as the premiums of the signatures and the indemnities related to transfers of professional athletes.
deputies have not remade the political debate on Friday. Thursday, elected officials, LR, as Marc Le Fur and Hervé Mariton, were very raised against reform “excessively complex” and very concerned of their “reversibility”, the right have almost unanimously promised to return it.
The minister of Finance, Michel Sapin, had conceded that “any reform is, by definition, reversible”. But he was asked about the interest of “return on reform, which has asked for as much work (…) and meets a no-brainer, in terms of simplification”.
The SGC Finance has, however, challenged in a press release this simplification. “Citizens hoping for a relief of their administrative procedures are going to be disappointed. In effect, the withholding tax shall not relieve or statement, nor notice of imposition, but will generate especially a series of steps to change its tax rate throughout the year in response to fluctuations in income and changes in circumstances, professional or personal,” said the union in the evening.