All the tax measures below are still to be ratified by parliament so may change.
The income tax bands per part (the barème scale) will be as follows
INCOME TAX RATE
Up to €9,807 0%
€9,808 to €27,086 14%
€27,807 to €72,617 30%
€72,618 to €153,783 41%
€153,784 and over 45%
Taxation of Investment Income
There is a planned harmonisation of all investment income tax regimes. The current abatement on dividends (40%) and on share sales (for the length of ownership) will be scrapped. There will be a standard flat rate tax rate applied to all investment income of 30% (which includes social charges). The new regime will also apply to assurance vie gains but there are exemptions where the amount deposited is lower than €150,000 per person (the old rules will still apply).
There is no change to the inheritance tax treatment of assurance vie contracts.
There is currently a get out clause to the changes but only if your marginal rate tax bracket is under 30%. If the option is taken then the current tax regime, including the abatement on dividends and share sale, will still apply.
Wealth tax (l’impôt sur la fortune) will only apply to real estate/property though property held by a registered business will be exempt. There may be further changes in the near future as this amendment is facing strong opposition form parliament. All tax brackets and rates remain unchanged.
From 2018 TdH will be phased out for households whose incomes are within certain limits with complete exoneration in 2020. In the first-year a reduction of 30% applies to those with a maximum income threshold of:
- Single persons whose net taxable income (after allowances) does not exceed €27K;
- Couples whose taxable income is no higher than €43K;
- Increased by €6K for each additional dependant in the household.
The installation of double glazed windows and insulated doors and shutters has been reduced to 15%, with complete abolition suggested for the end of March 2018.
Oil fired boilers are now also excluded from the tax credit.
CSG (one element of social charges) will be increases by 1.7% giving a total charge of 17.2% social charges in 2018. This will affect investment income (including rental income in France), pensions (where not exonerated via private healthcare/S1) and employment income in the main but will still be deductible against the following years income tax assessment.
Although turnover limits for micro-entrepreneurs will be doubled (from €33,200 to €70,000 for services and from €82,800 to €170,000 for sales) the TVA thresholds remain the same, therefore, if you go over the original limit by more than 10% or up to 10% in consecutive years you will be forced to register for TVA and charge it on all services/supplies/sales.
From 2019, those businesses with an annual turnover less than €5,000 will be exempt from business rates, the Cotisation foncière des entreprises (CFE).