By Nicole Booth, Forth Capital
The Finance Bill 2016 was presented to the Council of Ministers on 30th September 2015. The Bill does not contain any major changes to tax legislation, apart from a reduction in income tax for low income households. The main focus is on making electronic filing compulsory in order to prepare for the introduction of withholding tax from 2018.
The main changes affecting private clients are:
- Income tax for 2015 will be reduced for 8 million taxpayers through an increase in the décote (the threshold below which no tax is payable).
- The income tax bands will be increased by 0.1%.
- Taxpayers whose income exceeds €40,000 will be required to file tax returns online in 2016. However, in situations where it is impossible for an individual to file an online return, they can continue to file paper returns. This threshold will gradually be reduced over the next few years with a view to online filing being compulsory for everyone. Taxpayers who have the ability to file online but who refuse to do so will receive a warning the first year, and a further warning the second year, after which they will face penalties if they continue to refuse to file online.
- It was announced that a consultation will take place during 2016 on the operation of withholding tax which is due to be implemented in 2018. Further details will be announced in the Finance Bill for 2017.
- The threshold for electronic payments of certain taxes (income tax, wealth tax, taxe foncière and taxe d’habitation) will be reduced to €10,000 from 2016, and then further reduced progressively until 2019.
Other measures included in the Bill deal with combating tax evasion for companies.
Author's bio
Nicole has over 15 years’ experience specialising in cross-border taxation, having trained with two out of the Big Four in their expatriate tax departments before qualifying as a Chartered Tax Adviser. Following her career with KMPG and Ernst and Young, Nicole joined Blevins Franks where she specialised in tax planning for individuals relocating to France, Spain, Portugal and Cyprus and secured the position of Head of Tax.
Nicole joined Forth Capital’s London Branch in February 2015 as Head of Tax, focusing on all aspects of tax planning for individuals looking to relocate overseas, purchase properties abroad or return to the UK. Having previously lived in both France and Spain and being fluent in both French and Spanish with a high competency in Portuguese, Nicole has a strong understanding of the expatriate market and has the skills to advise a diverse range of individuals with differing needs.
Nicole is a member of the Chartered Institute of Taxation. She holds a BA honours in French, Spanish and Portuguese and an MA in translating. Nicole routinely lectures to the public and interest groups on cross-border tax issues, has featured on various radio podcasts and has contributed a variety of articles to a number of publications, including the professional publication ‘Trusts and Estates Law and Tax Journal’.
