Income tax will affect more households in 2025. According to estimates, 600,000 new people will have to pay it.
In France, income tax (IR) in France is a tax levy applied to personal income. In 2024, it remains a pillar of financing public spending, but in 2025, more people will pay for it.
How income tax works is changing
In France, income tax is based on a progressive scale divided into slices. Each income bracket is intended to be taxed at an increasing rate, ranging from 0% (for the lowest incomes) to 45% (for the highest).
In 2024, the tranche thresholds will thus be regularly revised to keep inflation account. This prevents salary increases from artificially moving French people into a higher bracket.
The tax is calculated on the basis of net taxable income after deduction of charges and allowances (example: 10% for professional expenses). The family quotient is used to adjust the tax depending on the composition of the home.
For example, a household with several shares benefit from a reduction thanks to this system. Withholding tax, in force since 2019, allows tax to be collected directly on income (salaries, pensions, etc.).
This therefore offers better readability to the French on their cash flow. Mechanisms exist to reduce IR such as tax credits.
For expenses such as home services, fees childcare or energy renovation work (via the MaPrimeRénov' system). But also tax reductions for donations to associations or certain investments.
Changes in store
In 2024, the government strengthened investment incentives in the energies renewable and the ecological transition. C which thus aligns taxation with climate issues.
Each taxpayer must declare their annual income, even if the tax is deducted at source. This declaration makes it possible to regularize situations and benefit from possible credits or tax reductions.
In 2024, online declaration remains compulsory for households with Internet access. But, despite its progressiveness, the income tax only represents around 20% of French tax revenue.
Some criticisms point to excessive complexity and related inequalities tax loopholes. In response, reforms envisage a simplification of the system and a better distribution of the tax effort.
Thus, income tax in 2024 remains a key tool to finance public services. While striving to evolve in the face of economic and social challenges.
2025: more French people will pay income tax
In 2025, a further significant price increase is expected in supermarkets from next March. At the same time, the budgetary situation remains uncertain.
Without adoption of a 2025 budget by the end of February for Bercy, 600,000 to 619,000 new taxpayers risk becoming taxable. Information given by the minister Public Accounts, Amélie de Montchalin.
In fact, according to Bercy, 619,000 taxpayers additional would be affected. A figure which far exceeds the previous estimates of 380,000 households mentioned by the OFCE.
Currently, out of the 41 million tax households, 44% is taxableor less than 18 million. If 619,000 taxpayers were added, this percentage would increase to approximately 45%.
For example, a French person with €2,963 net per month would pay €134 more if the scale remains frozen. Please note that the tax entry threshold depends on the tax income of reference (RFR) after reductions.
For a single person, this threshold is therefore set at €17,144 per year, i.e. environ 1 586 € nets monthly. For families, it increases according to tax shares.
Without an adopted budget, the scale freeze will remain in effect. However, the DGFiP recalls that the immediate impact is intended to be limited and a revaluation could be included if the budgetary negotiations move forward. by the end of February.
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