Is it possible to adjust the withholding tax rate in France?

30 January 2019



Many of you are wondering if it is possible to change your withholding tax rate upwards or downwards because you are no longer in the same situation as in previous years, or your total income has decreased or increased or again because your personal situation has changed. This article will then be able to enlighten you.

The sampling rate

The sampling rate is calculated from your returns from previous years. Indeed, when you file your tax return for 2017, a personalized rate was applied to you based on the income you reported. This has normally been communicated to you on your tax notice.

It is this same rate of deduction that will be applied to your income from January 1 to August 31, 2019. This tax rate will be updated in September 2019, following the submission of your 2018 income tax return.

This rate also makes it possible to calculate the instalments deducted by the administration from your bank account if you receive other income such as alimony or land income.

If you have not reported income for the year 2017, the administration will use your income for the year 2016 as a basis. However, the latter cannot go back beyond this, and in the absence of information, you will then be charged a non-personalized rate (neutral rate).

What is the difference between the personalized rate, the non-personalized rate, and the individual rate

The personalized rate

This is the rate calculated per tax household and based on your last return.

The individualized rate

It is possible to opt for this rate when there is a large income disparity within the couple. Thus, the rate will be calculated on the respective incomes of the spouses and no longer by
Your family situation (couple with or without children) is always taken into account.

The non-personalized rate

If you are an employee you can opt for this option. If you do not want your personalized rate to be communicated to your employer, then your employer will apply a neutral rate. If the rate is lower than your personalized rate, you will have to pay the tax authorities every month an amount corresponding to the difference between the rate charged and your personalized rate. Otherwise, the excess amount will be refunded to you.

The possibility of rate modulation

You will be able to ask the administration for a modulation. Indeed, the rate applied may not be more appropriate to your situation, and you may ask that it be revised upwards or downwards.

To obtain a rate change, there must be a difference of more than 10% between the levy you estimated and the levy that would have been applied.

Excessive errors on your part can lead to administrative sanctions (penalties and interest for late payment).

Mr. NOT single without children, reported 21,000 euros of income in the wages and salaries category in 2017 (or 1,750 euros per month). He paid 794 euros in tax in 2018 and the administration set his tax rate at 3.8% from January 2019. However, Mr PAS changed jobs in 2018 and currently receives 1,500 euros in salary (18,000 euros per year). On this basis, his theoretical annual tax is only 266 euros. He can therefore request a downward adjustment of his tax rate. The difference between his old tax (794 euros) and his new tax (266 euros) being 66%, the administration cannot refuse the downward adjustment and will increase his monthly levy from 3.8% (66 euros) to 1.5% (22 euros).

The administration required that the tax difference obtained must exceed 10% and 200 euros. The second condition relating to the amount has been deleted.

How to do it

If you comply with the above condition (difference of more than 10%), you can go to your personal space on the website section “Manage my withholding tax”. This will allow you to request an upward or downward adjustment of your sampling rate.

Cabinet Roche & Cie, English speaking accountant in Lyon, France.
Specialist in French Real-Estate and Non-resident taxation.