Tax withholding for newcomers in France

January 1st, 2019 marks the start of a new way for the French Tax Administration (“FISC”) to collect revenue tax (“Impôt sur le Revenu”) in France on a Pay As You Earn basis (“Prélèvement à la source”). The FISC will liaise directly with French employers to apply the appropriate tax rate to withhold the appropriate on each of the employees’ monthly salary based on their personal situation.

This new collection method will have a strong impact on newcomers into France, obviously for foreigners settling in France for the first time but also for French nationals coming back from long expatriations.

Indeed, they are unknown to French Tax Administration as they do not possess a valid French Tax Identification Number (“Numéro d’Inscription au Répertoire”, or NIR).

Indeed, without an NIR, newcomers will not be able to have their tax rate tailored to their personal situation as it evolves (variation of income level change in the number of dependents, etc.). As a consequence, a “non-personalized” tax rate (the highest possible for that revenue bracket) will be applied by default.

In order to mitigate this negative effect on each pay slip, Home Conseil Relocation has anticipated the issue by liaising with the FISC in order to develop a brand new service of Tax Registration for newcomers.

Contact us to learn more about this service and how Home Conseil Relocation can support you and your assignees avoid this problem!