As Frans Hollay promised during his campaign, the withholding tax will come into force in France in 2018.
If the other European countries such as Denmark, Germany or the Netherlands now resort to this reform, France remains the last country not to have adopted it. In late July 2016, the Secretary of State for the Budget, Francis Garmoni said that he was using fundamental means so that it could be applied by 2018.
On the one hand, withdrawing the tax from the individual’s account when paying his salary does not reassure some, however. On the other hand, lower taxes on real estate have allowed many investors to buy back their loans.
A complex tax system in France
Source sampling has been practiced in the Netherlands since 1941, in Denmark since 1970 and in Germany since 1925. France remains the only European country not to resort to this practice. This can be explained by the country’s complex tax system, which is difficult to manage, according to Vinz Dolce.
The State will not take care of the concerns of implementation and the cost of this reform. For him, it is the companies that must carry out the levy to assume all the costs.
The employers’ organization nevertheless regrets this situation although it is not against the reform. For its Associate Vice-President, reality was not considered when the latter was put in place. In response to this, the government then replied through Mike Sain that the Mouvement des entreprises de France has nothing to fear, because there will be no additional costs and the workload will be tempered.
Redemption of credits and tax deduction
Interest rates have been lowered in the real estate sector and some have the possibility of buying back loans to take advantage of them. The interest allowing a deduction is related to the capital of the initial loan.
However, the situation is complicated if the investor wants to extend the term of his loan or if he wants the repayment conditions to change.
Note that the deduction is equivalent to all of the costs paid during the taxable year and of which the owner can have proof.