The alleged simplification of withholding tax

THE ECO SCAN – The switch to withholding tax on income, wanted by President Hollande over three years, would be part of the shock of simplification.

We were promised the simplified payslip. It was to go from 30 to 15 lines as part of the simplification shock. Everything relating to employer contributions will be deleted. Employee contributions will be grouped by theme with a single title: employment, retirement, family, health… Simple? Ostensibly.

“Whatever happens with the withholding tax, at least one line will be added,” says Elvire Sekloka, elected from the regional council of the order of chartered accountants of Ile-de-France. Indeed, the generalized social contribution (CSG), which is already partly deducted at source, will not merge, for the moment (!), With income tax.

Commitment of candidate Hollande in 2012, the switch to withholding tax will not simplify anything. In 2014, 66% of taxpayers paid monthly payments and payment was made electronically in 80% of cases. The tax return has been simplified. Many boxes are now pre-filled by the tax services. In addition, the taxpayer will continue to report changes in personal circumstances and to validate, or not, his income tax return. According to the Council of compulsory levies, the procedures for calculating the tax depend on the complexity of the tax and not on its method of payment.

Finally, the transition from the current system to the new one will present technical difficulties, requiring long and complex tax smoothing. The year this measure is implemented, will the taxpayer pay his tax twice? “Impossible”, slice the PS deputy, Dominique Lefebvre, vice-chairman of the Finance Committee of the Assembly. And for the subjects who would change employers or personal situation at the same time, the steps would turn out to be nebulous.

Once the withholding tax is in place, what will be the terms for those who have several employers? How will the tax be levied for a couple? How to deal with heritage issues? So many questions that point to complex situations that must be considered by 2017!