Taxes: When the tax at source will be put in place?

Illustration of the statement of revenues, 2016. — GILE MICHEL/SIPA

  • According to Bercy, the deduction at source would cost three times less expensive than expected.
  • This reform would penalize small businesses according to the employers.
  • The government must decide by the end of the year.

They are wind standing. On Wednesday, the employers ‘ organisations are mounted to the niche against the deduction at source of tax on income.

Small businesses are being penalised ?

Measure lighthouse of the end of the quinquennium Holland, it provides that income tax is collected during payment of wages, and not more than one year after as is currently the case. For employees, the tax will be collected by the employer, on the basis of a tax rate passed by the tax authorities.

Also read: What the levy at source will change for you (and your employer)

This reform “will penalize more the SMALL [very small businesses] than large companies,” said the Confederation of small and medium-sized companies (CPME).

The day before, a series of reports, carried out at the request of the executive, and sent Tuesday to members of parliament and senators, however, had shown themselves favourable to the reform, passed by the former majority in the budget for 2017 and originally scheduled to enter into force on 1 January 2018. But the government had announced at the beginning of the summer his report, the time to perform a series of audits on the “technical robustness” of the device. “I don’t want to engage in this reform, without having the certainty that, technically, everything will be fine “, said in early June
Edouard Philippe.

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A reform less costly than expected

According to an audit by the general Inspectorate of finance (IGF), established with the support of Mazars, the “financial burden” associated with the transition to the levy at source will be from 310 to 420 million euros in the year of the scale for the companies. A charge may be “offset” by a series of appropriate measures.

In all cases, the amount is much less than the sum of 1.2 billion euros mooted in a previous report published at the beginning of the summer. But for the employers, it is too much. “The cost of the implementation of the deduction at source would, according to the rapporteurs, of € 50 per employee for very SMALL, compared to 8 euros for large companies,” says the CPME.

“It is, therefore, to say the least, contradictory to want to lead such a reform by making it bear the brunt of the load and risk on the SMALL and medium sized businesses while at the same time, the government says it wants to foster their growth and reduce their administrative burden, “says the employers’ organisation.

Alternatives ?

As the CPME, the Medef considers that alternative solutions, such as “the generalization of the mensualisation of the income tax imposed by the tax directly to the account of the taxpayer” would be more appropriate. This track, rejected by the IGF, is “unanimity among business leaders,” he wrote.

The ball is now in the camp of the government. He now plans to “draw the consequences” of these reports in the project of finance law presented in the end of the year.

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Also read: The unions fear the “disillusionment” of the taxpayers

 

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