Withholding at the source : everything you need to know

This is the great novelty of the year 2019 in tax matters. The deduction at source of income tax will take effect January 1, 2019, and will be effective on the

Withholding at the source : everything you need to know

This is the great novelty of the year 2019 in tax matters. The deduction at source of income tax will take effect January 1, 2019, and will be effective on the payroll for the month of January . The French still pose many questions about the tax rate, the income statement, the role of the employer and the possible complications. Le Figaro made the point.

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The collection at the source, what is it concretely?

The levy at source is to pay tax (on income) at the same time that it collects its revenues. This levy relates to the salaries and wages, retirement pensions, unemployment benefits, sickness benefits, and the taxable portion of redundancy payments.

in practical terms, the tax of the employees will be taken directly on their payroll, each month, by the employer. As for the retirees, their tax will be directly levied on their pension by the pension fund. The self-employed, farmers, or those who benefit from the income from land, will pay them the tax on the income corresponding by advance payments collected directly by the tax administration.

What rate will be applied?

The tax will be charged according to a rate of levy calculated by the tax administration which will apply to the net amount taxable at the income tax. The French had made their declaration in line were obtained at the end of the procedure a rate of levy's custom. It is this rate that will be disclosed to the employer (or the pension fund for retirees). When choosing them, 94% of French taxable had chosen the rate familiar.

change of rate of levy may be made downward or upward. In order to avoid a balance too large to pay in the following year, taxpayers who want to have the option from 2 January 2019 to go on the website of the income tax or call the hotline taxed at the source, in order to make changes.

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What is the date of entry into force of the reform?

The reform of the levy at source will become effective on 1 January 2019. The first sampling will take place at the end of the month of January, on the wages of the first month of the year.

Will it be possible to hide his tax rate to his employer?

Responsible for collecting the tax, businesses will have a duty of confidentiality and will not disclose the sampling rate of their employees. In addition, it will be possible to conceal its true rate of levy to his employer, the employer by opting for a rate "non-custom" function of the wage. If this rate is lower than the tax rate of the taxpayer, the latter will pay the difference to the tax authorities.

The tax on the income is going to increase with the sample at the source?

No, the income tax will not increase next year. The withholding tax is a reform of the mode of collecting the tax, but the calculation is, itself, will not change.

On the other hand, the psychological impact non-negligible - whether they are positive or negative - are to be expected. The feeling of receiving a salary entirely net could reassure the home, or, on the contrary, to give them the impression that they earn less than before.

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Will it still make an income tax return?

Yes, it will be necessary to always declare each year all of its income from the previous year to the tax administration.

2018 will be a year white, that is to say, without tax?

This year, the revenue is not exceptional (salary, property income, etc) will be rendered non-taxable due to a tax credit mechanism, the tax credit modernization of the recovery (CIMR). This is to prevent taxpayers from being charged twice in 2019 their income tax. Primo, for their income in 2018, and second, for their income in 2019. With the introduction of the levy at the source a game-changer, the taxpayers will pay for it, therefore, in 2019, their tax on their income earned in the year 2019.

The exceptional income (bonuses, capital gains, etc), perceived, in 2018, will be well taxed, and will not, therefore, a CIMR. For the business owners and the self-employed, the part of their income 2018 superiors to the best of the previous three years (2015-2016-2017) will also be subject to the IR. The tax administration wants to avoid that taxpayers who can control their income take advantage of the year-white, to place a maximum income.

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How will be managed the tax credits?

the minister of The Action and of the public Accounts Gérald Darmanin, announced last September that some of the beneficiaries of loans and reductions of tax in 2018 would be a deposit of 60% as of the January 15, 2019. This payment will be tax credits for the human services (e.g. child care expenses), the tax credits for residents in long-term care facilities, the tax reductions for rental investment and the tax reductions for donations and dues.

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What number to call in case of questions?

A non-premium number has been put in place to respond to taxpayers ' questions about the reform. "From 2 January 2019, the users can call at no extra cost (the price of a local call) the 0.809.401.401 to join the agents of public Finances on the withholding at the source," said Bercy . The 40,000 agents trained specifically will respond Monday to Friday, from 8h30 to 19h, all the questions and will be specially mobilized in January. In addition, the public finances general Directorate (DGFIP) will run from 2 January a daily meeting in the video on his page Facebook . This show will take place from 12 noon to 12.30 pm daily.

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SEE ALSO: income Taxes: Understand the tax at source for a married couple with children

Updated Date: 27 December 2018, 00:00

Kathleen Lees


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