FRANCE: 20% discount on taxable income if registered with an association?
Thread poster: MandyT
MandyT  Identity Verified
English to German
Oct 9, 2004

Hi,

I read and heard from other translators that you get a 20% discount on your taxable income in France if you are registered with an association agrée or you have an accountant do your end of the year accounts. Now I've seen an accountant and mentioned it to him. He said, you only get the discount when registered with the association agrée. Is this correct??

Thanks for your help

Dydy

[Subject edited by staff or moderator 2004-10-10 00:01]


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Claudia Iglesias  Identity Verified
Chile
Local time: 03:18
Member (2002)
Spanish to French
+ ...
Hy Dydy Oct 10, 2004

As your question is exclusively about what happens in France, I'd advice to go to the French forum to ask this, you should receive more answers.

Claudia


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Sara Freitas
France
Local time: 07:18
French to English
20% additional standard deduction Oct 10, 2004

Hi Dydy.

Yes, it is true. If you register with one of the associations, you may check a box on your income tax return in order to get an additional standard deduction of 20% that applies only to your freelance income (not to wages or a spouse's wages or salary).

I pay about 200 eur per year for the association, and my accountant insists that it is worth it, so I keep doing it. Probably depends on your tax bracket, though.

Regards,
Sara


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Narasimhan Raghavan  Identity Verified
Local time: 11:48
English to Tamil
+ ...
Can you offset the 200 Euros from your taxable income? Oct 10, 2004

I mean, is it a deductible expenditure? In that case you save an additinal tax percentage on 200 Euros. In the bargain you may go to a lower income bracket and the tax percentage might further decrease. Plus the 20% standard deduction. You need not be an accountant to figure it out. ( I am not one).
Cheers and happy tax saving,
N.Rghavan

Sara Freitas-Maltaverne wrote:
Yes, it is true. If you register with one of the associations, you may check a box on your income tax return in order to get an additional standard deduction of 20% that applies only to your freelance income (not to wages or a spouse's wages or salary).
I pay about 200 eur per year for the association, and my accountant insists that it is worth it, so I keep doing it. Probably depends on your tax bracket, though. Sara


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xxxsarahl
Local time: 22:18
English to French
+ ...
Yes Oct 10, 2004

It is true, but you have to sign up with an AGA before March to be able to deduct 20%.
However, joining an AGA is time-consuming, as you have to attend the meetings, and you have to send them your income tax return for approval before you send it to the fisc, and they want you to use their software.
As Sara said, it's worth it if you're expecting a hefty turnover. If you're just starting out, it's probably not worth the time and money.
My 2 €cents.
Sarah


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Sara Freitas
France
Local time: 07:18
French to English
It really does depend, but savings are not the only benefit Oct 13, 2004

Narasimhan Raghavan wrote:

You need not be an accountant to figure it out. ( I am not one).
Cheers and happy tax saving,
N.Rghavan



If you are already in the lowest or untaxed bracket, then obviously there are no direct savings with the additional standard deduction.

However, an added benefit is that the association must certify/verify your tax returns, giving you added protection against a future audit.

In terms of being time consuming, at least at my association it is not. I voluntarily attended a day-long training session for my own information and, as for the paperwork, my accountant prepares it and sends it on to the association for their stamp at tax time. Colleagues who do the association forms themselves say that it is just an added step in the end-of-year reckoning process--plus driving over to the association at the last minute to get certified, of course!

So far, the system has worked out well for me and the accountant insists that the extra protection against a future audit alone is worth the fee, and having helped many clients through the audit process, he probably knows what he is talking about! An audit is definitely something to avoid if possible, whether you are actually guilty of anything or not!

Happy bookkeeping!

Sara


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Marie-Céline GEORG  Identity Verified
France
Local time: 07:18
English to French
+ ...
Not time-consuming at all for me Oct 28, 2004

sarahl wrote:
However, joining an AGA is time-consuming, as you have to attend the meetings, and you have to send them your income tax return for approval before you send it to the fisc, and they want you to use their software.
Sarah


Hi Sarah,
My AGA does not take a minute of my time if I don't want to! Maybe I'm just luckier than you
They offer a dozen conferences a year which I'm free to attend or not, they invite me to the yearly Assemblée Générale but it's no problem if I can't go and that's all.
They ask me for a copy of my income tax form for approval but they have already pointed to a mistake I had made (forgotten to fill a line, I don't want to know how many probems I would have now...) so I feel safer.
They also offer advice when I have problems with my bookkeeping - which I do on my own. Figures are no problem for me, but there are so many categories that at the beginning I often called to ask "where do I put this or that expense".
Finally, they have no software that they require me to use. They propose account books but it's not compulsory to use them - I chose to create Excel spreadsheets with all I need in them and they don't care as long as the accounts are correct.
So for me, registering with the AGA has always been positive!

Regards
Marie-Céline


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Brian KEEGAN
Local time: 07:18
French to English
+ ...
AGA = tranquil life and lower tax Nov 18, 2004

Hi Sarah,

My AGA in Paris has been a godsend. They do my tax declarations at the end of the year, as well as the balance sheet and the other heavy accounting things. My input is limited to keeping my invoices and expense receipts in order and producing the income and expenditure journal at the end of the year. They are always willing to answer any accounting questions I might have from time to time (like can I expense my new computer? - answer: no, you have to amortize it over two years - ouch! actually, not very ouch because they do the amortization entries for me). I am not required to use their software (the poster must be referring to accounting software, which I do not use: a paper journal does the job fine), nor am I required to attend their meetings or training seminars (some of which are actually quite interesting). The membership fee is 160 euro or so a year, and they charge me 550 euro to do my accounts and tax declarations. For anyone who might be thinking "what? they do his accounts and audit them... isn't that a conflict of interests?": the accountants and auditors work at two distinct entities. Sarah: I can give you their phone number if you like, just drop me an email.

As for the 20% deduction, the tax authorities deduct 20% from your net earnings and tax you on the rest. So instead of being taxed on 50000 euro, for instance, you are taxed on 40000.

The membership fee itself is a deductible expense, as is, naturally, the cost of consolidating your accounts.

You probably know that freelancers are taxed to the hilt in France, so any way of reducing your tax bill has to be grabbed. Even if your net earnings are not that high (like say for instance 15000 a year), the protection against a tax audit offered by AGA membership is in itself worth the money.

HTH
Brian


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