Paris (AFP)

Automatic declaration, tax credits, donations: one year after the entry into force of the withholding tax on income, other developments await taxpayers this year and the next.

"This is not a balance sheet, it is a project," said Minister of Public Accounts Gérald Darmanin, presenting the results of the 2019 income tax campaign, marked by the entry into force of the levy. to the source.

The new projects begin in January, with the extension of the levy to employees of individual employers. Systems now allow these employers to avoid having to calculate and pay social security contributions and income tax themselves. According to figures released Tuesday by Bercy, memberships to these devices have surged since the end of 2019.

The next step will take place in the spring during the traditional income tax return. The tax administration will propose to a certain number of households to no longer complete this declaration, and to switch to the automatic declaration regime. This concerns tax households which have regular income, "pre-fillable" by the administration and which have no change in family status or address to declare. Or about 12 million tax households, according to estimates by Bercy.

The government still hopes to increase this figure by allowing households that make regular donations to associations to include them in the pre-filled declaration.

Mr. Darmanin announced the opening of a "consultation" in this sense with charitable associations, for an experiment in 2021, before generalization in 2022. This project poses several technical difficulties, in particular a confidentiality issue, since the associations donations received from taxpayers, normally anonymous, must be reported to the tax authorities.

Ultimately, the challenge is to make the donations contemporary and the amount of the tax credit to which they give entitlement, whereas it is now calculated with a one-year lag and paid by a 60% deposit in January, then regularized in the summer.

- budgetary effort -

More generally, the government wants to make the payment of most tax credits contemporary with the expenses incurred each month by households over the next few years. From July 1, households located in the North and in Paris who employ an employee at their home and are beneficiaries of personalized autonomy assistance (APA) and the Disability Compensation Benefit (PCH), will experiment with the monthly payment of their tax credit.

The objective is to generalize this mechanism throughout France in 2021, i.e. for 1 million people.

"The goal of the game is to + contemporaryize + tax credits, to stop with the installments" currently in force, said Gérald Darmanin. But "each time it requires a" financial effort on the part of the State, so "it will be a budgetary question to know which one comes first," he added.

On the balance sheet of the first year of the withholding tax, the minister announced that the income tax recovery rate had reached 99.1% in 2019, with revenues of 71.7 billion euros.

This amount is higher than what was written in the initial finance law for 2019, thanks to the improvement in the recovery rate, but lower by 900 million euros to the modified objective of the amending finance law, adopted at the end 2019.

This difference can be explained by more downward rate variations during the year than those upward, a concentration of high earners at the start of the year which distorted expectations and a higher than expected recourse tax-free overtime, detailed the minister.

"Doing the full analysis" of the 2019 income tax "will help us with the 2020 (revenue) forecasts, important in the development of the nation's annual budget," said the chief financial officer. public, Jérome Fournel.

As households start paying their income tax in 2020, 24.3 million households will benefit from this tax cut or the phasing out of the housing tax, or both, for a average savings of 595 euros, said Darmanin.

© 2020 AFP