Tax cuts and credit: new features of the 2022 finance law

(Photo credit: Pexels - Lucas)

(Photo credit: Pexels – Lucas)

The taxpayer can reduce his account with the tax authorities either through the investment deduction mechanism (financial expenses are deducted from taxable income) or through the tax exemption by reducing the tax paid, which corresponds to a direct reduction in the amount. payable tax. In this case, two scenarios are possible: a simple tax deduction, which is deducted from the tax calculated on a progressive scale, without a refund, if the amount of the tax deduction exceeds the tax amount, and a tax credit, which results in the reimbursement of the excess (or all) by the General Directorate of Public Finance, if the tax credit exceeds the tax amount. Find out in this article about all the new features of the 2022 Finance Act that you need to take into account in order to properly file your tax return, regarding rebates and tax credits.

The tax reduction on donations to organizations helping the most disadvantaged has been increased to 75%.

Donations by taxpayers to organizations that help the poorest segments of the population entitle taxpayers to a reduction in tax in an amount equivalent to 66% of the amount paid. However, in 2021, as in 2022, this reduction in exceptional cases is increased to 75% of the total amount of donations, not exceeding 1000 euros, in the organization of assistance to the most disadvantaged (compared to the ceiling of 552 euros in 2020) .

This system is in addition to the regular system of donations to organizations of general interest, allowing you to receive a discount of 66% of your donation, up to 20% of taxable income.

For example, by paying €1,500 to the Red Cross, you can get a tax reduction of 75% on €1,000 and 66% on €500. So you can deduct 1,080 euros (750 + 330) from your income tax.

Reduced tax on investments in SMEs increased to 25% of the investment amount

In order to support the local economic structure, investments in unregistered small and medium-sized enterprises less than 7 years old, headquartered in the European Union or a state of the European Economic Area, under certain conditions and in particular the obligation to hold their shares for 5 years, entitles to tax reduction, usually 18% of the amount invested up to €50,000 or €100,000 per couple. But this rate, with the approval of the European Commission, has been raised to 25% for investments made between March 18, 2022 and March 31, 2022.

Therefore, the tax reduction for a person who has invested €50,000 in an SME since March 17, 2022 will be €12,500 and €25,000 for a couple.

Please note that direct investment in SMEs is not the only option. This tax reduction also applies to your investments in SMEs through crowdfunding, as well as private equity funds such as FIP, FCPI and FCPR. However, investments in SMEs through these funds are limited to an investment ceiling of €12,000.

Extended personal services tax credit

To encourage people to declare household staff, the individual employer receives a tax rebate or tax credit equivalent to 50% of the amounts paid to his employee, up to a ceiling of €12,000, which can however be increased if there are children in the household. , people over 65 or disabled.

The issue of eligibility for certain out-of-home services (e.g., picking up children from school, accompanying an elderly person to medical appointments, etc.) has been clarified by the 2022 Finance Act and is now treated as a tax credit eligibility for certain individuals. services that were abolished by the Council of State in 2020, in particular services provided outside the country when they are included in the set of services, including residential activities.

Also note that it is now possible to receive a tax credit every month instead of the previously lump sum payment one year behind.

See also: Capital income: what taxes?

Introduction of a new tax credit for the installation of an electric vehicle charging system at home

Finally, the 2022 Finance Act introduces a new tax cut or tax credit to encourage the transition to electric vehicles. Indeed, owners of electric or plug-in hybrid vehicles will be able to benefit from a tax credit corresponding to 75% of the cost of installing a charging system in their home (primary or secondary residence), up to a limit of 300 euros. .

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