Annual Income Tax Return

Your house or main home has not been in France for 6 months (this year) OR you or your parents earn wages abroad OR you or your parents do not receive any income in France or make any investments in France. In short: your family's economic activity is abroad.

Imagine you have a small shop where you sell cupcakes that you make yourself. Now, rather than having a big business with lots of complicated rules, you can be a "micro-entrepreneur"! Being a micro-entrepreneur in France is like being the boss of your own small business. You can sell things you make yourself, like cakes or jewellery. But the best part is that it's simple. You don't have to fill in a lot of complicated paperwork like a big company would. When you earn money selling your cupcakes, you have to pay tax on them. But being a micro-entrepreneur makes that a bit easier. You pay tax on what you earn each month, but it's not too difficult. And if you don't earn much money one month, you won't pay much tax either. So being a micro-entrepreneur in France is like having your own little business where you can sell what you like, but without too many complications. It's like a fun adventure where you manage everything yourself, just like a real entrepreneur!

If your parents have a large field where they grow vegetables or rear animals, when they sell these vegetables or animal products (milk, eggs), they earn money. This is called "farm profits".

Imagine you have a special talent, like painting beautiful pictures or playing music. Sometimes people want to buy your paintings or pay you to play music at parties or special events. The money you earn from selling your paintings or playing music is called "non-commercial profits". When you give this amount to the tax people, you also have to tell them how much money you spent doing what you love. For example, you may have bought brushes and paint for your paintings, or you may have paid for music lessons. You can subtract all these expenses from the money you earned to find out how much non-business profit you really made.

The APA stands for Allocation Personnalisée d'Autonomie. It is a financial aid that the French government gives to elderly people who need help to stay at home or to pay for a specialised establishment, such as a retirement home. These people can get help with a variety of things, such as eating, washing or even getting around. Now, when it comes to tax, recipients often have to declare the amount of this allowance they receive. This is because even if it's money that the government gives to help them, it's still important to mention it on the tax return. This can sometimes have an impact on the amount of tax the person has to pay.

Accumulation or life insurance policies taken out abroad are like special savings that people make in other countries. Let's say you have an aunt who lives in England and has taken out a life insurance policy there. Now, as far as French tax is concerned, if you have this kind of policy abroad, it's important to mention it on your tax return. It's as if you were saying to the tax people, "Hey, I've also got a bit of money set aside in another country." This is necessary because the tax authorities want to make sure that everything is transparent and that you declare all your income, even that which you have earned or set aside abroad.

PERP, PREFON, COREM, CGOS and similar contributions are a kind of special savings that people make in France for their retirement. It's like putting money aside each month for later, when you're older and want to stop working. People who have these types of special savings often have to mention them on their tax return. It's important to do this because these special savings can sometimes qualify for tax benefits, which means you could pay less tax. So, when you declare these contributions on your tax return, it lets the tax authorities know that you have put money aside for your retirement and that there could be tax benefits for you.

The CRDS is a little something that people in France pay to help fund social security. You know, social security is a bit like a big box that helps people when they're ill or need to go to hospital. So when we talk about the CRDS in the context of taxes in France, it means that people pay a small part of their money to help fund this box called social security. It works a bit like putting a little bit of money into a special piggy bank to help pay the medical bills of people who need it. It happens automatically before you get the money from your job.

CSG is a kind of tax that people in France pay directly on their income. Some people can deduct part of the money they pay in CSG from their tax. It's a bit like having a jar where you put money for your tax, and someone says to you, "Hey, you can take a little bit of the money you put in that jar to pay the CSG." That can be a good thing because it can help people pay a bit less tax. But not everyone can benefit, there are special rules for that.

Micro-BNC is like a special way for people who have their own small business, such as an artist, a private tutor or a consultant, to pay their tax. When you have your own small business, you earn money by selling your services or products. For example, if you're an artist, you might sell your drawings or paintings. But when it comes to paying your tax, it can be a bit complicated to work out exactly how much you've earned and how much you have to pay. Micro-BNC makes things a little simpler. It works like this: instead of having to calculate all your income and expenses in detail, you can just say to the taxman: "Hey, I've earned so much money with my little business". And they'll say: "OK, so you have to pay so much tax".

Short-term net capital losses for French tax purposes are a bit like buying something and then selling it, but losing money in the process. Let's say you buy shares in a company for 100 euros, but then when you sell them, you can only sell them for 80 euros. This means that you have lost 20 euros on the sale, which is known as a "capital loss". Now, when we talk about "net short-term capital losses", we mean that we add up all the capital losses you have made by selling things in the short term, i.e. in less than a year. For example, if you sold shares or property and lost money on these sales, all these losses are added together to form net short-term capital losses. This is important for tax purposes because these losses can often be deducted from your gains, which means that you only pay tax on your net gain, after taking your losses into account. It's a bit like being able to subtract the money you've lost by selling things from the money you've earned, before paying tax on it. So, in short, net short-term capital losses for French tax purposes are when you lose money by selling things in the short term, and all these losses are added together to form a total. These losses can often be deducted from your gains, so you only pay tax on your net gain. It's a way of taking into account when you pay tax when you've lost money on your transactions.

The Fichier des Impositions des Particuliers is a database containing all the tax information of taxpayers in France. Everyone who pays tax has a unique identification number in this file, called the "FIP number". This FIP number is used by the tax authorities to uniquely identify each taxpayer and to manage their tax information securely. It is also used to track the history of tax returns, tax payments and any refunds. Where to find it: income tax notices, tax identity statements (RIF), letters from the tax authorities. It's already there on the online pre-filled tax return!

A tax number is a bit like a telephone number, but for your tax. Everyone who pays tax in France has their own tax number, a sort of unique identifier that the tax authorities use to find out who you are and how to manage your tax. It is used for income tax, secondary council tax and property tax. Where to find it: pre-filled tax return (top left of the first page, next to the online access number), tax notice (top left, in the "Your references" section).

The Pinel scheme is like a magic wand for people who want to buy a flat or house in France. It helps people to become homeowners while enjoying tax benefits. Here's how it works: the French government introduced this scheme to encourage people to invest in rental property. Basically, if you buy a flat or house to rent out, and commit to renting it out for a certain period (usually 6, 9 or 12 years), you can benefit from a tax reduction on part of the price of your property.

The Plan d'Epargne Retraite, or PER, is a bit like a special piggy bank that you use to put money aside for when you're older and want to stop working. The French government created the PER to encourage people to save money for their retirement. It's a bit like a present for your future self! You put money into this plan, and it grows quietly over the years. What's really cool about the PER is that the money you put into it can be deducted from your taxes. This means that if you put money into your PER, you could pay less tax each year. It's like a little reward to encourage you to save for your retirement. Then, when you're ready to retire, you can get back the money you put into your RSP, and you can use it to enjoy a nice, comfortable retirement!

For French tax purposes, net short-term capital gains are a bit like the small profits you can make when you sell something, such as shares, property or other investments, after holding them for a short time. Let's say you buy shares in a company for €50 and sell them a few months later for €70. Well, you've made a net short-term capital gain of €20, because you earned €20 by selling your shares. These net short-term capital gains may be subject to tax in France. It's as if part of the money you earned by selling your investments was recovered by the State in the form of tax. However, there are also special rules that sometimes allow you to pay less tax on these capital gains. For example, if you have made capital losses on other investments, you can deduct them from the capital gains to reduce the amount of tax you have to pay.

Withholding tax is like paying a little bit of tax each month as you earn money. Instead of waiting until the end of the year to pay it all at once, part of your tax is deducted directly from your wages each month, before you even receive them. It's really handy because it means people don't have to do complicated calculations or save money to pay their tax at the end of the year. It makes things simpler and easier to manage. And do you know what? The amount deducted each month is calculated according to what you earn, so it adapts to your situation. If you earn more, you'll pay a bit more tax each month, and if you earn less, you'll pay a bit less.

This is a special way of deferring the payment of tax on the profits you make when you sell certain assets, such as shares or property. Let's say you bought some shares a few years ago for €100, and now they're worth €150. If you decide to sell them, you'll make a capital gain of €50. Normally, you would have to pay tax on this capital gain. However, there are situations in which you can defer payment of this tax. These are known as unexpired deferred capital gains. Basically, you won't have to pay tax on this capital gain straight away, but at a later date, when you sell other assets or when certain conditions are met. For example, if you reinvest the capital gain in other shares or similar assets, you could benefit from a tax deferral. You will only pay tax when you sell these new assets. In short, it's a kind of small tax savings account where you put aside the money you'll have to pay later. It can be useful for managing your finances and investing intelligently.

This is a special way of declaring your income if you are self-employed or have your own small business. Let's say you run a cupcake shop. Rather than simply declaring a fixed amount of income, as some salaried workers do, with the controlled declaration scheme you can declare your income in detail. This means that you have to declare all your income and all your expenses relating to your business, such as the cost of ingredients and equipment, or the cost of renting your shop. Then the tax authorities check all this information to make sure it's correct. That's why it's called a "controlled declaration": because your income and expenses are closely scrutinised by the tax authorities. This can be advantageous because you can deduct your expenses from your income, which means that you only pay tax on what you have left after subtracting your expenses from your income. It's a bit like someone saying to you: "Hey, you've earned so much money, but because you've had to spend so much on your business, you'll only pay tax on what you have left."

Global income" and "revenu foncier" are two important terms in the world of French tax. Global income is like the sum of all the money you earn in a year. It includes your salary if you work, but also other sources of income such as rent if you have a property that you let out, interest you earn on your savings, or even dividends if you invest in shares. Now, property income is a little more specific. It relates solely to the income you earn from renting out a property you own. For example, if you have a flat that you rent to someone, the money you receive in rent each month is part of your income from property. When you file your tax return, you have to declare to the tax authorities both your overall income, which includes all your income from different sources, and your property income, which relates solely to income from property rental.

Income from movable capital is income that you earn from things that you own, such as money that you have invested in a bank, shares that you have bought in a company, or even interest that you receive on loans that you have granted. For example, if you put money in a bank and it gives you some money in return, that counts as income from transferable securities. Or if you bought shares in a company and it pays you dividends, that is also considered to be income from movable capital. When you file your tax return, you have to tell the tax authorities about all the income you have earned in this way. This enables them to calculate how much tax you have to pay on this income. It's important to declare this income correctly if you want to comply with the law. And sometimes there are special rules or tax advantages for certain types of income from transferable securities, so it's important to understand how this works.