Despite the Covid-19 crisis, which has led to a rise in the deficit and public debts, the executive has broadly honored its commitment not to raise taxes. Zoom in on the main tax measures of interest to individuals through the PLF 2021.
New income tax scale
The first change concerns the income tax scale, whose brackets have been raised by 0.2%, i.e. the forecast change in the consumer price index excluding tobacco.
This scale, applicable to income earned in 2020, now applies as follows:
- Below €10,084: 0%,
- From €10,084 to €25,710: 11%,
- From €25,711 to €73,516: 30%,
- From €73,517 to €158,122: 41%,
- Over 158,122 euros: 45%.
Extension of the discount
The tax rebate granted to low-tax households has been extended to those whose gross tax, calculated on 2020 income, is less than 1,720 euros for singles and 2,847 euros for couples.
By way of comparison, in 2020, the decote benefited households whose gross tax was less than €1,611 or €2,653.
New tax credit for the installation of an electric car charging station
Taxpayers who install an electric vehicle charging station in a home that they own, rent or occupy free of charge as their principal residence are eligible for a tax credit granted by the French government. The tax credit represents 75% of the expenses incurred for the purchase and installation of the charging system, up to a maximum of 300 euros.
It should be noted that this tax credit is limited to one system for a single person, and two for a couple subject to joint taxation.
Changes to the Pinel scheme
The Pinel scheme will be extended beyond December 31, 2021. However, its end is announced for 2024, with a gradual reduction in the benefits offered to investors. From January 1, 2023, investors will see their tax reduction drop to :
- 10.5% for a 6-year rental commitment,
- 15% for a 9-year commitment,
- 17.5% over 12 years before falling even further the following year.
Tax changes applicable to compensatory benefits
An amendment has been passed to make the tax treatment of sums paid between spouses following divorce or separation more flexible. The amendment takes account of two decisions handed down by the French Constitutional Council in 2020. More specifically, mixed-form divorce compensation payments will be eligible for a tax reduction of 25% of the amount withheld, up to a limit of 30,500 euros, if paid over at least 12 months.
Another change: the contribution to the marriage expenses is now deductible from the income of the spouse who pays it, even when the amount is not set by the judge.