As part of the finance bill for the year 2025, the government announced that the income tax scale will be indexed to inflation “to protect the purchasing power of the French”.
Good news for French taxpayers. While the option of freezing the income tax scale was quickly ruled out at the beginning of October, the Ministry of the Economy and Finance confirmed this Thursday, October 10, as part of the Finance Bill , its intention to index the 2024 income tax scale to inflation (excluding tobacco).
“This measure, the cost of which is estimated at 3.7 billion euros, prevents nearly 530,000 households from falling within the scope of income tax. It protects the French from an increase in taxation linked to inflation,” Bercy said.
In addition, the income brackets of the default withholding tax (PAS) rate grids will be adjusted according to the evolution of the income tax (IR) scale. However, this development remains to be determined with the final inflation for 2024, which will not be known before the beginning of 2025. It should, barring any surprises at the end of the year, be around 2%.
The new scale indexed to inflation
According to a technical document obtained by Context, the 2025 tax scale on income for the year 2024 adjusted by the Ministry of the Economy and Finance could thus be broken down as follows:
- 0% tax rate for income up to 11,520 euros (compared to 11,294 euros)
- 11% tax rate for the portion of income between 11,520 and 29,373 euros (compared to 28,797 euros)
- 30% tax rate for the portion of income between 29,373 euros and 83,988 euros (compared to 82,341 euros)
- 41% tax rate for the portion of income between 83,988 euros and 180,648 euros (compared to 177,106 euros)
- 45% for the share of income above 180,648 euros
Please note that for taxpayers who have attached a married person or person with dependent children to the household (under certain conditions), the amount of the tax reduction of 6,674 euros is also indexed to inflation and therefore increases to 6,807 euros per person. support.
The monthly direct debit bases for mainland France readjusted
Concerning the monthly withholding tax bases, here too indexation to 2% inflation is applied. Thus, in mainland France, the tax rate would be 0% for a person with a net taxable income of less than 1,623 euros, according to Context data.
The rate then increases gradually, to 2.1% for taxable income greater than or equal to 1,794 euros and less than 1,915 euros; at 4.1% for taxable income greater than or equal to 2,155 euros and less than 2,298 euros; at 11.9% for taxable income greater than or equal to 3,546 euros and less than 3,991 euros…
The withholding tax rate reaches 20% when the monthly taxable income is greater than or equal to 6,988 euros and less than 8,728 euros and it goes up to 43% for the bracket greater than or equal to 55,170 euros.
Monthly collection bases for overseas departments
For part of overseas France, namely Guadeloupe, Martinique and Réunion, the monthly collection bases are also increasing. For example, the withholding rate for a taxpayer domiciled in Martinique will be zero if their monthly income does not exceed 1,862 euros, whereas the latter should not exceed 1,825 euros with the old scale.
For a taxpayer from the three overseas departments mentioned above, the withholding rate of 2.9% will apply for a monthly base greater than or equal to 2,376 euros and less than 2,623 euros, while the bracket was between 2,329 euros and 2,572 euros this year.
As for Guyana and Mayotte, the income ceiling for a 0% deduction rate is higher than the other departments: this will amount to 1,994 euros compared to 1,955 euros mentioned in the previous grid. . The rate of 2.9% will apply to Mahorais and Guyanese whose monthly deduction base is greater than or equal to 2,709 euros and less than 2,813 euros monthly.
Modified tax cuts
Same dynamic for certain tax reductions. More precisely, the tax reduction “resulting from the application of the family quotient” will increase from 1,759 euros maximum per half-share to 1,794 euros maximum per half-share from 2025.
The tax reduction concerning “single and divorced taxpayers”, corresponding to “the share granted for the first dependent child” will be a maximum of 4,232 euros instead of a maximum of 4,149 euros this year.
Another change, the tax reduction, “resulting from the application of the family quotient” applied to taxpayers living alone with several adult children or whose child(ren) died in certain conditionswill go from 1,050 euros maximum to 1,071 euros.
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