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Paye and tax reduction on your gifts

Since January 2019, income tax is directly deducted at source, by the employer, the pension fund, the Employment Office or the tax administration. Concretely, what does this change for you and the gifts which you make to the Médecins Sans Frontières Foundation?

1. Is the tax reduction on gifts abolished with the switch to PAYE?

NO. Tax reductions on gifts to associations and foundations are maintained.

2. When am I going to receive my tax reduction?

On the 15th of January 2020, you received an advance of 60% of the amount of the tax reduction from which you benefit for gifts made in 2019. As you will not yet have made your 2019 income declaration (and therefore not yet declared your 2019 gifts), this advance will be calculated on the basis of your gifts made in 2018.

In spring 2020, you are going to declare your 2019 income and gifts.         

In July 2020, you will receive your tax assessment notice for your 2019 income. The balance of 40% of your tax credit will be calculated (on the basis of your declaration made in the spring).

If you have already paid the whole of your tax on your 2019 income, this balance will be paid to you by the tax administration. Otherwise, it will reduce the amount of your tax still due.

3. What if I make my first gift in 2019? Will I still receive the advance?

As in January 2020 you had not yet declared your 2019 income and gifts, the calculation of the advance paid on the 15th of January 2020 was based on the amount of the gifts made in 2018. Consequently, if no gift was made in 2018, you have not received any advance for gifts. It is, however, possible that you have obtained an advance on your tax reductions linked to child minding costs, human services, rental investments, etc.

4. Will the tax reduction decrease with PAYE?

NO. If you are a donor to the Médecins Sans Frontières Foundation, you will still be able to deduct 75% of your gift (within the limit of €50,000) from your Property Wealth Tax / IFI, and 66% from your Income Tax*

If you give to the Médecins Sans Frontières association, you deduct 75 % of your gift from your Income Tax, within the limit of €552 in 2020, and then 66 % beyond*.

 

* Maximum reduction of 20% of taxable income.

I give to

The Médecins Sans Frontières Foundation  

  Calculation of the reduction*

 My Income Tax reduction

 My gift costs me 

60 €

60 x 66 %

40 €

20 €

150 €

150 x 66 %

99 €

51 €

500 €

500 x 66 %

330 €

170 €

1 000 €

1 000 x 66 %

660 €

340 €

5 000 €

5 000 x 66 %

3 300 €

1 700 €

10 000 €

10 000 x 66 %

6 600 €

3 400 €

50 000 €

50 000 x 66 %

33 000 €

17 000 €

 

The example

Prélèvement à la source

Claire and Paul are married and employ a cleaning lady for two hours a week.

In 2019, the couple have a net monthly income of €6,000: €2,400 for Claire and €3,600 for Paul. They benefit from a 50% tax reduction for the costs of employing a home help.

Since 2013, Claire and Paul have made a gift in November to the Médecins Sans Frontières Foundation. In 2018, they made a gift of €1,500 which entitled them to a 66% tax reduction on income tax.

The household’s PAYE tax rate is 11.3 %.
In 2019, Claire therefore has €271 deducted from her salary every month to pay her tax (€2,400 x 11.3 %); Paul has €407 deducted (€3,600 x 11.3 %).

On the 15th of January 2020, the couple received from the tax administration:

- a €750 advance on the tax reduction for domestic employment costs in 2019 ((€2,500 x 50% x 60%).

-  a €475 advance for the gifts made in 2019 (1200 x 66% x 60%), calculated on the basis of the €1,200 in gifts made in 2018.

In July 2020, the couple benefits from a €500 reduction for domestic employment costs (€2,500 x 50% x balance of 40%) and a €515 reduction linked to their gift to the Médecins Sans Frontières Foundation (€1,500 x 66 % - advance)

 

PAYE CALENDAR

Date

Step

April/May 2019

2018 income tax statement

During summer 2019

Receipt of tax assessment notice indicating the PAYE rate and the timetable of the payments which will be debited by the tax administration in 2020

From January 2020

The tax is deducted each month from the income paid by third parties, or deducted from the bank account by the tax administration (income without third party payers).

15th January 2020

Anticipated payment of 60% of the amount of the tax reduction for gifts in 2019 (advance amount calculated on the basis of the gifts in 2018).

April/June 2020

2019 income tax statement in which the total amount of the gifts made in 2019 is indicated.

July 2020

Receipt of the 2019 tax assessment notice. The balance of the tax reduction is calculated and paid by the tax administration.

 

TO FIND OUT MORE ABOUT PAYE

► Consult the Ministry of the Economy website

► Consult the page dedicated to tax reductions for gifts to associations and foundations.

► Call The Tax Department on 0810 46 76 87.

Do you still have questions? Don’t hesitate to contact Catherine Béchereau, Philanthropy and Loyalty Manager by calling 01 40 21 56 88 or by email at donateur@fondationmsf.fr


Updated on 26/03/2020