2018, a tax-free year
Now that the income tax season is ending for this year, you may find yourselves wondering how the “prélèvement à la source” will affect you. Much like the PAYE system in the UK, starting on 1st January 2019, income tax will be directly withheld from your revenues.
But wait, you’ve just paid your income tax for 2017 and next year it will be automatically withheld from your income – does that mean that you won’t have any taxes to pay on your 2018 income?
The short answer, as always with the French Tax administration, is yes and no. Yes because your normal income (i.e. salary, pension, professional income, etc…) won’t be taxed. However, any exceptional income in 2018 will be taxed, including higher than usual revenues (a sudden spike in activity for example).