In France, the tax issue is a subject of recurring political debate because taxes play an important role in household and business budgets. Thus, any tax reduction announcement is generally welcomed by taxpayers. The French government is planning a tax cut for the year 2023, here are the details.
First of all, it is important to underline that this tax reduction will be specifically intended for the most modest households. The objective is to improve the purchasing power of the most vulnerable households, which often have difficulty making ends meet. The rise in prices that France has been experiencing for several months could offer them some respite. Indeed, the income tax scale has been increased by 5.4%.
From today, Thursday April 6, more than 40 million French tax households will receive their tax declaration for the year 2023. This declaration is pre-filled with the salaries and other remuneration received during the year 2022. For In some cases, the deduction at source was not sufficient, which makes their declaration closer to regularization. Taxpayers who have chosen the option of a paper declaration and a mailing must file it before the deadline of May 22, while that for pre-filled declarations is set for June 8.
Thanks to inflation, the government revised the income tax scale. Consequently, the bill for the taxpayer could be lower. The scale was adjusted on January 1, 2023. This is an automatic revaluation following the abnormally high level of inflation observed in the previous months. Mechanically, if the income received in 2022 has not increased, the taxpayer will pay less tax. On the other hand, if income has increased but less rapidly than inflation, the taxpayer concerned will pay the same amount of tax as the previous year. As a reminder, the price increase was measured at 5.2% by INSEE.
This is “good news” for single people with minimum wage. Taxpayers receiving the SMIC are not taxable thanks to the revaluation of the scale. The non-taxable portion in France for the year 2023 is 16,372 euros. The latter is always above the first tax bracket, because it takes into account the deductions to which certain taxpayers may be entitled.
Here are the 2023 tax brackets, on 2022 income:
