Taxes 2022: the withholding tax, how does it work? Here is everything you need to know

The withholding tax makes it possible to streamline the payment of income tax. (© RomanR / Adobe Stock)

Always have time to put your nose in your papers complete your tax return, even if the weather at that time doesn’t help motivate you. However, for some taxpayers, the deadline for filing their declaration is approaching.

An administrative task is more necessary as it can have an impact on the amount withdrawn each month of origin. Explanations of this system in place for the third year.

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What is withholding tax?

Introduced on January 1, 2019, the withholding tax consists of a direct deduction on income, per month, the amount of income tax payable.

For employees or retirees, this tax is collected directly by the employer or by the pension fundpublic-service visualization.

For the self-employed, farmers or beneficiaries of property income, installments equal to the amount of income tax to be paid are directly deducted by the tax authorities.

What interest?

Generally, this withholding tax should make household tax collection possible in near real time.

The final income paid each month to employees or retirees is therefore income of which a portion is deducted to pay income tax.

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One way to spread the charge over 12 months, and remove lag a year, as happened then, the commemoration of the Ministry of Economy. “In addition, the tax automatically fits the amount of revenue received,” Bercy said.

How do I get my levy rate?

A levy rate, calculated by the tax authorities, and notified to the employer, or pension fund to set up the levy, is applied to the income. It is calculated “on the income of year n-2 declared in the spring of year n-1, with an update in September”, the ministry explained.

Each month, this levy rate makes it possible to collect the amount corresponding to the tax to be paid monthly.

In the event of a change in the situation during the year (change in income or family situation), it is possible to request a change in the rate.

Do you still need to file your taxes?

Yes, because filing your tax return is mandatory, withholding tax or not. It also makes it possible to update its information, enough to allow tax authorities to calculate whether the amount of tax already deducted at source is as close as possible to the taxpayer’s actual current situation.

If after the income declaration, a discrepancy arises in what has already been deducted, the taxpayer may refunded (this is also the case in the event of a deduction refund or tax credit) or should thereafter discharge of the balance to be paid.

How do I change my debit rate?

Each year, the levy rate is changed in September, according to the income declaration made in the spring. For couples, this rate may be individual.

It is possible to fix yourself this rate throughout the year, once a change in the situation occurs that may have an impact on the amount of his tax: significant changes in income, marriage, PACS, birth, death, divorce, etc.

In this case, you should remember to update your situation in your private space on impots.gouv.fr. On the tax portal, the dedicated space also allows you to manage your withholding tax.

Note that if the rate change is your initiative, it will end on December 31 of the current year, and will not be automatically renewed next year.

Find here an explanatory video of 2020:

How do I know if I will be paid? And when?

If after your tax return, you have a balance to pay despite the deduction at the source or the opposite of the refund of taxes to be collected, you will find out about this in your tax notice:

  • In the case of reimbursementthis one will interfere during the summer of 2022.
  • In case there is a balance to be paid, you continue to pay your withholding tax for the current year in addition to the additional tax. You should pay the supplement between September and December 2022. Sometime in September if the amount to be paid is less than 300 euros. On four occasions if not from September 26 to December 27.

For any questions, please contact the tax authorities, online, by phone at 0809 401 401 (Monday to Friday from 8:30 am to 7 pm, excluding public holidays, free service + call price) or at its nearest tax office.

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