Since January 1, 2019, Payment of French income tax is processed by withholding at source (PAS) according to 2 different methods varying according to the nature of the income.
The payment is made by withholding at source by the debtor of income or made by installments paid by the income owner by for BIC, BNC, BA and Rental income.
Tax collection is now mainly carried out in 3 stages:
- in N, deduction at source (by way of withholding at source or by installment) on most income, at the time of collection;
- in Y+1, declaration of income received in Y (income subject to the PAS and income excluded from it);
- then, still in N+1, payment of tax on income received in N, after deduction of the amount already paid via the PAS and any applicable tax credits and reductions.
1. Payment at source
Income tax deduction at source Since 2019, taxpayers have been deducted the amount of their income tax at source, i.e. they pay each month (in principle) the income tax due for income received during that month.
However, the PAS does not concern all income, such as:
- because they are already subject to a withholding tax at present:
- income from movable capital,
- capital gains on real estate (and capital gains relating to tangible personal property),
- income from auto-entrepreneurs (BIC or BNC),
- capital gains from the sale of securities: due to the technical constraints posed by the exceptional nature, the impossibility of anticipation and the complexity of determining of these gains,
- exceptional income subject to the down payment system (for the same reasons as capital gains): professional capital gains, equipment subsidies, insurance indemnities compensating for the loss of an element of fixed assets and charges or expenses having the nature of professional capital losses, and exceptional or deferred income subject to the quotient,
- income from foreign sources giving rise to a tax credit equal to French tax (“false credit of tax”: indeed, in this case, the IR is in principle neutralized, there is therefore no need to deduct a tax at source),
- the income received by non-residents.
Thus, despite the implementation of the PAS, part of the income generated for one year will only remain taxed the following year, following the declaration of all of the taxpayer’s income.
|Methods of withholding at source (PAS)|
|Deduction at source||Advance payment|
|Type of income||
Before deduction of charges (actual costs or deduction of 10%)
|Flat-rate basis N-2 or N-1
Application of standard rules for determining taxable income
Exclusion of exceptional income:
Modulation possible under conditions
Zero rate for modest taxpayers
Modulation possible subject to conditions (*)
Modulation possible subject to conditions (*)
|Payment||Deduction at source deducted by the debtor (employer, pension fund, etc.) when paying the income||Deductions by the tax authorities from the bank account (or the taxpayer’s savings account) as desired :
|Regularization||Submission of the declaration in N+1
Liquidation of the income tax on N income under the conditions of common law
Allocation of withholding taxes (deduction at source and installments)
|(*) Automatic adjustment in the event of a change in family situation or optional on request of the taxpayer (on the basis of his contemporary situation and the estimate of all his income for that same year).|
The household rate is determined in relation to the last declaration filed by the taxpayers, i.e.:
- on the basis of the gross income tax (before reductions and tax credits) on income N-2 for direct debits made from January to August,
- on the basis of the gross income tax (before reductions and tax credits) on N-1 income for direct debits made from September to December.
This principle was exceptionally changed in 2020. Indeed, the rate applicable from January 1, 2020 (and sometimes even from December 2019 depending on the responsiveness of collectors and the information transmitted by the DGFiP) to August 31, 2020 has not been that calculated in August 2019, applicable from September 1, 2019, but a recalculated rate to anticipate the reduction in income tax applicable from the 2020 income
2. Filing income tax return
. source does not entail the extinction of the obligation of declaration of their income by taxpayers. Indeed, each taxpayer is required to declare his income under the same conditions as before the introduction of the withholding tax.
Thus, whether the income is subject to the PAS or excluded from it, it must be reported on the tax return. The income to be included in the declaration for year N is that of year N-1.
For 2021, declaration of income received in 2020, the deadlines for filing are set:
- for “paper” declarations (residents and non-residents), May 20 at midnight,
- for declarations online on the impots.gouv website. fr (EFI):
- for zone 1 (departments 01 to 19 and non-residents): on May 26 at midnight,
- for zone 2 (departments 20 to 54 and Corsica): on June 1 at midnight,
- for zone 3 ( departments 55 to 974/976): June 8 at midnight.
- for online declarations in EDI (remote transmission of declarations published via private software): June 8 at midnight in principle (regardless of the taxpayer’s place of residence).
3. Payment of the balance of the tax
Following the filing of the income tax return, the year following their collection, the administration will calculate the tax due in respect of all the taxpayer’s income by deducting the amount already paid via the SAP as well as the applicable tax deductions and credits.
The calculation leads to an adjustment which takes either the form of an additional payment, or of a refund in the event of overpayment.
When the taxpayer must make an additional payment of an amount greater than €300, the payment of the balance due is spread over the last 4 months of the year.
4. Methods of payment
Different methods of payment exist, such as:
- payment by bank or postal check made out to the order of the Public Treasury,
- in cash at the counter of the tax service,
- by interbank payment order (TIP) accompanied by a RIB if necessary,
- by electronic payment on the internet,
- or direct debit.
However, since 2019, when the amount of the sums to be paid exceeds €300, payment must be made electronically (i.e. by direct debit or electronic payment).
Since July 28, 2020, and for amounts not exceeding €300, taxpayers can pay their taxes and tax claims at tobacconists, in cash or bank cards.
For more information
Head to the Basics of Income tax