France Mulls End To Newly-Wed Tax Perk

by Ulrika Lomas, Tax-News.com, Brussels

21 September 2010

The French government is considering the idea of removing the fiscal advantage currently benefiting newly-weds in France.

According to the French Budget Minister François Baroin, the French President Nicolas Sarkozy is due to decide shortly on whether or not the proposal, which could serve to generate several hundred million euros for the state, should be included in the country’s 2011 finance bill.

At the moment in France, any couples that get married complete three income tax returns for that particular fiscal year. Couples complete two individual tax returns for the period leading up to the marriage and then a joint tax return for the period following the marriage. Splitting up the couple’s income in such a way enables newly-weds to pay less in tax.

If the government elects to adopt the measure, couples completing income tax returns for 2011 and beyond will be required to chose whether or not to complete two individual tax returns or to submit a joint tax return covering the entire fiscal year. Couples getting divorced will also be required to complete two separate income tax declarations.

The French government, which is due to present the 2011 budget bill to the council of ministers on September 29, has pledged to cut EUR10bn in tax breaks (les niches fiscales) this autumn.

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