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France: Withholding tax on wages, new rules effective 2019

France: Withholding tax on wages, rules effective 2019

A major tax reform measure will be effective 1 January 2019—the introduction of withholding tax regime (“prélèvement à la source” or PAS) that is intended to eliminate the one-year time lag between the receipt of income by workers and the remittance of the tax on this income.


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Until now, income tax has been paid in the year following the year in which income was received. However, beginning 1 January 2019, all income from employment that is taxable in France will be subject to withholding tax, regardless of whether the income is French-sourced or foreign-sourced. Withholding tax will be collected either at source or automatically by means of installments.

The new withholding tax regime, while significant for employees, will have a major impact on French employers. Beginning in 2019, they will be responsible for collecting tax on employee wages (withholding tax) and then for remitting the withheld taxes to the French tax authorities. The new measure also could affect Swiss employers that employ French tax residents working in Switzerland.


Read an October 2018 report prepared by the KPMG member firm in Switzerland

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