Roche & Cie

The Pay as you earn system in France : Update by the french tax authority

03 Sep 2018

The French tax authorities (DGFiP) confirms that the tests carried out allow the implementation of the levy at source under good technical conditions
The information currently circulating in the press on technical work carried out in the pilot phase of the levy at the source, leads to the following clarifications:

1. For the past year, in-depth tests have been conducted on tens of millions of cases to ensure the robustness of the device. It involves many partners, private and public. On this occasion malfunctions can be detected, which is also the aim pursued, and correction procedures are developed. Their implementation is already effective or planned by the end of the year. This work is completely classic in the IT field, as can be confirmed by the parties involved in these operations and in particular the payroll software publishers. The one-year delay in the entry into force of the reform decided by the government has made it possible to carry out these tests, which allow errors to be identified and corrected before they occur.

2. These tests never revealed situations that could not be resolved before the reform was launched. On the contrary, they have made it possible to further improve the system, in particular, certain controls. These tests identified duplicates cited in the press and determined how to deal with them to prevent their recurrence. Contrary to what is relayed, it is impossible for these duplicates to lead to double taxation.

3. The positive outcome of the tests confirmed the feasibility of implementing the SAP in January 2019.

In addition, all the steps already taken, this time in real terms, have been completed in good conditions and strictly according to schedule:

Dissemination of rates to taxpayers, either on the internet or on the paper tax notice sent to them from July.
Confirmation or modification of their options by taxpayers who so wish.

The transmission of the rates to employers in order to prefigure the withholding tax on pay slips, for those who so wish, is ready to be carried out in mid-September, as planned.

Source : www.impots.gouv.fr

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