Propose changes in the fiscal system for pensioners in the 2026 budget is already increasing anger; This is what is planned and how it affects foreign retirees.
France has just achieved its 2025 budget, but the attention is already resorting to the 2026 spending plans, with Prime Minister François Bayrou giving a press conference that describes the financial problems facing the country and what must be done to address.
France faces a Budget deficit of Soing and the parliamentary crisis of 2024, which knocked down a prime minister and left the country without the expense plans agreed at the beginning of the year, the situation has worsened.
Although Bayrou’s government made this other to approve a budget, it did not address the main problem of the nation that cannot balance its books, so Attense is already in the 2026 budget, which was discussed in this year’s fall.
Among the ideas that have been carried out are the drainage of the tax credit of 10 percent to which they are entitled to French pensioners; Indeed, condemn retirees to pay more taxes.
What is the proposed change?
At present, the beneficiaries of a French pension benefit from 10 percent Fiscal extension – o Fiscal subsidy. This means that 10 percent automatically deduces from their income from the guest house before calculating its Income Tax.
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Then, let’s take the example of a couple who receives a monthly pension of € 1,800: their total combined pension income of the year would be € 43,200, but with the 10 percent discount, their taxable income would only be € 38,880.
In this example, the annual Income Tax Invoice would be € 1,086 with the deduction or € 1,760 without it (this calculation does not include any income they may take, and they also do not take into account the deductions of social positions).
The deduction cannot be less than € 450 per person or more than € 4,399 per household.
The 10 percent discount also applies to workers, and is intended to act as a deduction for professional doors: at this stage, there are no plans to change it for workers.
He has bone in place since 1977, and initially it was a one -year measure for pensioners in the year after their retirement, aimed at compensating the loss of income when they stopped working.
He was extended to a permanent measure in 1978 by Maurice Papon (yes, the same papon who was later declared guilty of war crimes for his role in deportation of the Jews who last World War II, and who was a police chief in Paris.
How does this affect foreigners?
Tax deduction applies to people who receive a French pension, so it would affect foreigners who worked in France and then retired here, but would not affect people who retired to France but have never worked here.
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For those who have ‘divided’ careers with half of their working life in France and half abroad, it would apply to the French part of their pension.
Foreigners who retire to France and have a guest pension paid abroad have different fiscal agreements: the exact detail depends on the fiscal treaty between France and the country where the pension is paid, but in most cases the guest houses are imposed in the country of origin.
There are, for now, some exceptions and, in the case of British retirees, denouncing the type of guest house (public or private): find the complete details here.
Explained: How are foreign pensions in France?
Will this really happen?
The change was largely proposed due to the financial problems of France: the established government objective is to save 40 billion euros in the 2026 budget, with the drainage of the fiscal credit of pensioners that it is estimated to save around € 5 billion.
Government discussions are expected to begin in July, with parliamentary debates that will begin in autumn. It is likely that this budget of ‘cost reduction’ be very close.
Any measure that disadvantage pensioners are generally considered taboo in French political circles, so it remains to be seen if this idea reaches the final bill.
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