Tax changes to the home based employment scheme CESU
The French government has announced its 2020 budget with seemingly bold plans to reduce taxes for households by €9.3 billion euros and businesses by more than €1 billion.
This is the headline detail – however what are some of the other changes proposed?
One concerns CESU or le chèque emploi service universel.
Established in 1994 CESU has an estimated 2 million users. The popular scheme enables a person – a private employer – to claim 50% of the cost of employing someone to undertake various jobs associated to the home; these include looking after children or elderly people, babysitting, small works in the garden/DIY and home tuition. In all, some 150 activities are covered and whilst they may take place outside the home they must relate to the home.
Currently tax payers using the scheme have to enter the total sum paid for CESU activities on their tax return each year.
One change is that from 2019 income declarable in 2020, the tax authorities – the Fisc – will automatically insert the amount paid by the employer directly onto the tax Declaration. This is to reduce the risk of fraud, errors and improve overall efficiency.
Another change will be the deduction at source for private employers starting in January 2020.
In July 2020 two French departments, in Paris and in northern France will pilot a scheme aimed at closing the gap between the date the charges are made and the benefits are applied.
If you would like to discuss further the impact of the tax changes please get in touch..
Pelican Consulting SARL is a bespoke French-regulated « Conseiller en Ingénierie Patrimoniale » and International Taxation consultancy company, owned by Dr Michael Annett with over 20 years’ experience in France as well as the UK.
Our expertise as wealth management consultants rests in advising on investments and savings, pensions, marital and succession law and international taxation.
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