Many French people fear the process of completing and validating their income tax return, but for a significant number of taxpayers, the exercise has no impact on their budget. This is because less than half of French people actually pay income tax, with only 44.7% of tax households being subject to this obligation in 2023, according to figures from the Directorate General of Public Finances. This represents a decrease of 0.8 points from the previous year, with only 18.2 million out of 40.7 million tax households being taxed in this way.
Despite less than half of French people being involved in this specific obligation, there are other forms of mandatory deductions in France. Agnès Verdier-Molinié, director of the Ifrap foundation, highlights that there is also the generalized social contribution (CSG), which is essentially an income tax although it is often perceived as a social security contribution by citizens.
In addition to income tax and CSG, there are other types of mandatory deductions in France such as value-added taxes (VAT) and property taxes. These deductions can have a significant impact on individuals’ budgets and it is important for them to understand how they work and how much they owe each year.
It is worth noting that while not all French people pay income tax or are subject to mandatory deductions, many do contribute to public services through other means such as social security contributions or direct payments towards certain programs or initiatives. However, these contributions may not always be visible or understood by citizens, leading to misunderstandings about their role in funding government policies and programs.
