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The withholding tax – new year, new rules!

Your pay slips for 2019 will no longer be the same - taxes will be deducted directly from your salary. So don't be surprised, it's not your salary that has been reduced but the state regulations.


Publication : 30/11/2018
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The entry into force of the withholding tax on income is set for 1 January 2019.

The purpose of the withholding tax on income is to adapt the tax collection for a year to the real situation of the user (income, life events) for that year, without changing the calculation rules. Its objective is to eliminate the one-year gap between the collection of income and the payment of tax on it.

WITHHOLDING TAX, WHAT IS IT?

Today, income tax is paid one year after the income is received.

For example, in 2018, we will pay the income tax collected in 2017.

This delay can lead to cash flow difficulties for those who are experiencing changes in circumstances affecting their income and/or taxes on income:

● in their personal lives (marriage, pact, birth, divorce, death);

● in their professional life when they are employees (retirement, wage increase, job loss, business creation, parental leave) or independent (fluctuations in activity);

● when they are landlords (exceptional charges, unpaid rents).

 

With withholding tax, the tax is paid at the time the income is earned.

Thus, in 2019, we will pay the income tax collected in 2019.

Nevertheless, we need to continue to take care of our tax declaration. The next one will then be in spring 2019.

More information: https://www.economie.gouv.fr/prelevement-a-la-source