This year 2023 has many new things in store for taxes. End of the contribution to public broadcasting, abolition of housing tax for main residences… Several changes have thus taken place and must be taken into account by taxpayers.
One of them directly concerns the tax assessment since two new figures will appear this year. This stems from a measure requested by Les Républicains deputies via an amendment and integrated into the amending budget. From now on, the tax notice will not only indicate the withholding tax rate, but also the average income tax rate as well as the marginal tax rate.
If this does not make any difference for the sums to be paid, this novelty has above all an educational scope. “Our compatriots often confuse the average tax rate and the marginal rate”, justified the LR deputies, as MoneyVox notes.
However, these figures can be completely different. The average income tax rate is calculated by dividing net tax payable by net taxable income. It is therefore generally very close to the withholding tax rate.
Conversely, the marginal rate is much higher since it corresponds to the bracket of the scale that applies to the upper part of income. Its usefulness is therefore not anecdotal because it makes it possible to anticipate the tax cost that an increase in income could entail. These two new pieces of information will therefore now be clearly indicated on the tax notice to allow French people to better understand and read these figures.