Income Tax Calculation

[peter1026]

Hi everyone,

I'm slowing finding my way around the french tax system, and I "think" I'm more of less there.... but just to make sure, could someone please have a quick check to see if I'm not making a fundamental mistake:

As an example (unfortunately I won't earning so much) lets say the my Annual Salary would be €100,000.

Salary p.a. €100,000
Deduct social taxes (health, pension etc) approx. 8% € 92,000
Deduct 10% for other costs (not sure what to call it) € 82,800

Total 'Taxable' Income € 82,800

Divided by number of parts: In my case 3.5 = € 23,657

Then I progressively tax this amount as follows:

Income progressive Tax Rate Tax Amount
0 -> 5,687 0.0% € 0
5,687 -> 11,344 5.5% € 311.12
11,344 -> 23.657 14.4% € 1723.82
TOTAL: € 2,034.94

Then the €2,034.94 is multiplied by the 3.5 parts = €7,122.33

Total Income Tax for this example is € 7,122.33

Am I right???

Any info would be greatly appreciated.

Peter

[Bevdeforges]

The general process is ok, but I'm wondering where you got the 8% figure for social taxes. It's lots closer to 20% in that you get to exclude most "cotisations" from income to arrive at "taxable income" - which is what your employer reports for you.

Then, you take 10% from that as a sort of "standard deduction" for the costs of making a living. If your costs are higher than that, you can take more, but it's up to you to justify (via receipts) the entire amount you deduct for this category.

The basic calculation at that point is how I understand it to work - but there are a bunch of other lesser adds and subtracts for interest income, tax breaks for charitable donations, home renovations, etc. etc. that also come into play here.
Cheers,
Bev

[parsnips]

Hi peter, you are correct, but it is easier to use the "Fiche de calculs facutatifs" which you will find in centre pages of the 2041-NK -Notice which comes with the 2042.

[giantpanda]

Hi!

Something like that, but not the way you have done it. 1st deduction line is not correct.

If you were earning in France declarable Euro 100,000, you were married, had 3 children, you would pay Euro 7412 tax.

Declarable income is that given to you by your employer which is not your gross income.

Your average tax rate would be 8,32%

Now of course there would be other matter to consider:

You have to declare your world income, and possibly the taxes already paid.
You certainly have interest of share dividends.
You would probably also be subject to ISF ( Impôt de Solidarité sur la Fortune );

Also you would be able to deduct ( crédit d'impôt ) " cotisation d'épargne retraite "in the course of 2008 of 9000 for you and 3218 for your wife. NB. That means if you did use this, that these sums would be deducted from the taxable income of 90,000.

Details from a French Income Tax program.

You can also use a " simulateur " see for example here:

http://www.impots.gouv.fr/portal/dgi...tstandard_5322

Yours,

giantpanda