Withholding tax: France lags behind in Europe

THE ECO SCAN – Along with Switzerland, France is the only country on the European continent not to have implemented an income tax withholding system.

He resurfaced two weeks ago and is talked about almost every day. After the government spokesperson, Stéphane Le Foll, who acknowledged that the government was planchaait on a deduction at the source of the income tax, the Prime Minister Manuel Valls promised during the congress of the PS this Saturday that the government would “succeed”, in particular by initiating “the withholding of income tax, the first step in modernizing our taxation”.

This reform, which would be part of the shock of simplification demanded by the President of the Republic, has also won the approval of the French. More than 60% of them are in favor, according to an OpinionWay study. .

The idea is not new: France has been thinking about it for almost twenty years. All the major European countries have however already opted for withholding tax: and. Along with Switzerland, France is thus the only country of the Old Continent that has not yet implemented it.

• Germany: Every citizen is subject to income tax from 8,130 euros of annual salary. A “tax card” (“Lohnsteuerkarte”), renewed at the beginning of each year, is then given to them, mentioning all the information useful for the withholding tax: deduction class, family situation, number of dependent children, last salaries… It is issued to the taxpayer, on request, by the municipality on which he depends. The levy is then “final” if the employee has not had deductible expenses during the year or other sources of income such as savings income.

• Britain : This is the most frequently cited withholding tax system. All income is deducted at source. Taxpayers are taxed individually and not by household or couple. Any UK citizen earning more than £ 9,441 (around 13,000 euros) per year is subject to income tax. The sums due are withdrawn monthly by the employers. In the case of savings income, the bank or financial institution is also responsible for withholding tax on interest or on any dividend. Any additional income such as rental income will be entered in a tax return on which the additional income as well as the amount of taxes already paid will be indicated.

Belgium: the withholding tax is made on the previous year but takes into account the family situation and capital income. It is up to the employee to declare them and to his employer to take them from the payslip. For the liberal professions, it is the reverse. Taxes are collected quarterly in advance based on expected income.

Spain: the deduction is made by the employer. The following year, the taxpayer still declares his income, which can give rise to an adjustment (balance payable or reimbursement). Spaniards must communicate very personal information to their employer: number of children, amount of their mortgage, etc. This legislation is quite similar to that currently in force. Italy where certain types of income are still subject to declaration.