The tax credit for remote work now regulated
Published on 31 December last year, the 2022 Finance Act provided a number of clarifications in terms of income tax and tax credits.
In particular, it provides a framework for the home employment tax credit
- Tax advantage
The home employment tax credit is provided for in Article 199 sexdecies of the General Tax Code (referring to Article D7231-1 of the Labour Code).
It is open to all French tax residents employing a remote worker in their main or secondary residence (whether or not they own the residence).
It is equal to 50% of the amount of expenses incurred for home employment but capped at an annual amount of €12,000.
An additional €1,500 applies:
- For each dependent child (in the event of alternating residence an increase of 750€ will apply instead)
- Per member of the tax household over 65 years of age
The increased ceiling cannot exceed €15,000.
The activities included in this tax credit are in particular:
– Gardening services
– DIY services
– Preparing meals at home
– School support courses
– Mobility assistance for the elderly or disabled
– Home maintenance and small-scale DIY operations
– Computer and internet assistance services
- The framework of the tax credit provided by the 2022 Finance Act
Initially, the administrative doctrine accepted to include in this tax credit the services performed outside the home if they were part of general offer of services with the main activity at home.
In a decision rendered on 30 November 2020, the Conseil d’Etat reversed the case law by stating that the law authorising the inclusion of services performed outside the home was cancelled.
The 2022 Finance Act re-establishes the former administrative doctrine by considering services provided outside the home to be eligible for the tax credit forremote work if they are included in a package of services that includes a home activity as its principal activity.
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