Income tax refunds start tomorrow in France: are you eligible?

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[Article updated July 20 at 15:50 to further explain taxation at source.]

Taxpayers in France who are eligible for reductions or credits linked to their income tax for 2021 – or who have withheld too much at source due to the evolution of their situation, should start to be reimbursed from tomorrow (Thursday July 21).

Every year, several million people receive these reimbursements from the tax authorities in the summer. This year, the dates for this are July 21 and August 2.

In France, tax reductions may be granted, for example, in relation to qualifying charitable donations made in that tax year.

Tax credits are given to help people meet expenses such as childcare in a creche or crèche.

You can find out more about tax reductions and credits on the government website Service-public.fr.

A person may also have paid too much tax at source if the total amount deducted from their salary during the year is greater than the amount due. Income tax is normally deducted from wages monthly or quarterly, but this does not take into account any credits, reductions or any change in circumstances, so the difference is settled at a later date (tomorrow) .

This can happen if you have forgotten to declare a change of employment in your online tax area or, for example, if you have not notified the tax authorities of the birth of a child, which changes the composition of your tax household. .

Tax reductions and credits are normally paid in two instalments

Tax reductions and credits are normally paid in two installments: 60% in January and the rest in the summer if it is demonstrated that the expenses continue once the income for the year in question has been declared in the spring and therefore known.

These are certain so-called “recurring” expenses, such as tax credits for home help or childcare or union membership, and reductions for dependency charges in retirement homes, donations to good causes or to invest in a rental property.

The system in which tax credits are collected retrospectively is gradually being replaced by automatic payment, which allows people to benefit from them at the time the expense occurs.

Those eligible for reimbursement do not need to do anything as the tax authorities need to be aware of the payment to be made.

If you are eligible and the authorities have your bank details, you will receive the reimbursement by bank transfer. The payment will bear the reference ‘REMB IMPOT REVENUS’ and will be sent by ‘DGFIP FINANCES PUBLIQUES’.

If the tax authorities do not have your bank details, a check will be sent to you.

You may have to pay back some money if you had less expenses in 2021 than in 2020. If the amount owed is less than €300, you will pay on September 26, and if it is more than €300, you will pay in four instalments: September 27, October 27, November 25 and December 27.

From autumn 2022 (and no later than mid-December) it will be possible to reduce or cancel the payment of tax for next January via your personal space on the tax website under Manage your advance of tax reductions and credits if it can help your cash flow.

Some credits/reductions are not included in the installment system at the start of the year, such as a reduction for investing in a small business. Those you claim in your declaration in 2022 for 2021 expenses will be regularized this summer. Previously, CITE tax credits for environmentally friendly home improvement were included (removed from 2021, people being asked to apply for an eco-grant instead).

Any ‘tax credit’ (as opposed to ‘reduction’) due to you which cannot be settled by reducing your tax payable will be paid by the tax office directly into your bank account.

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