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Olivier Dussopt, can you put an end to the perverse effects of tax-exempt overtime?

2021-04-30T16:15:53.609Z


Every day, Le Parisien calls out to an actor in society (politicians, bosses, artists, athletes, etc.) to ask him a question that conceives


Established by Nicolas Sarkozy in 2007, abolished by François Hollande in 2012, the tax-exempt overtime system made a comeback in 2019 thanks to the yellow vests crisis.

Thus, the remuneration received for overtime (or additional hours when one is part-time) is exempt from tax up to the annual limit of 5,000 euros.

This year, for the 2020 tax return, this ceiling is raised to 7,500 euros if some were made between March 16 and July 10, a period of health emergency.

However, if these overtime hours are well tax-exempt, their amount is still added to the reference tax income. A bad surprise because the latter is used as a basis for determining the allocation of certain social assistance (scholarships for colleges, high schools, prices for nurseries and canteens, allocation of social housing, etc.) and the reduction or exemption from certain taxes (housing tax, property tax, etc.).

It is by becoming aware of “this injustice” that Carole, a faithful reader of Le Parisien - Today in France, has decided to write to us and challenge you, Mr. Minister Delegate. Accounting assistant living in the Hauts-de-Seine, Carole, 61, worked overtime last year to the tune of 5,000 euros to replace her supervisor, on sick leave. "We replace someone for the smooth running of our service and we realize that, in the end, we will be penalized," Carole gets angry.

She and her husband will quickly see the very steep consequences of these tax-exempt overtime on their wallets. “We live in low-cost housing and, until now, we did not pay any additional rent because we were at the limit, within a few hundred euros,” she explains. There, according to my calculations, we will have an additional rent of 160 euros per month at least! And we would have to repay part of the housing tax when we were exempt from it. "

To see the fruit of all his efforts fly away is bad.

"In the end, what did I do all this overtime for?"

1,500 euros?

Paying taxes, I find that quite normal, but that I do not admit.

"Pointing to a government communication deficit, Carole, a year and a half from retirement, is more worried about other taxpayers.

“Can you imagine a mother who brings up her children on her own and who, because of that, would have several helpers cut off?

"

Mr Deputy Minister, Carole has a question for you: could you put an end to the perverse effects of tax-exempt overtime by rearranging this system, at least for the time of the Covid crisis?

Olivier Dussopt's response: "The rules are balanced and fair"

Olivier Dussopt, Minister for Public Accounts.

LP / Philippe de Poulpiquet

To Carole, our reader, for whom the 5,000 euros of overtime worked in 2020 will rhyme with a surcharge and a partial return to the payment of the housing tax, the minister replied that no, the system in force will not be refitted and explains why.

“Since January 1, 2019, overtime is subject to a reduction in contributions and is exempt from income tax up to a limit of 5,000 euros net per year and per employee.

This threshold was increased to 7,500 euros during the state of health emergency.

However, this income is not excluded from the tax reference income (RFR) which measures the actual level of income from the tax return. The RFR can thus be requested by CAF for the granting of allowances, be used to assess the level of resources giving right to exemptions from local taxes or even serve as a basis for the contribution on high incomes. It is therefore an objective unit of measurement used for many devices, ”recalls Olivier Dussopt, who emphasizes that the Tax Reference Income (RFR) is a tool for measuring the taxpayer's income.

“For the RFR to correctly reflect the level of income, it must include certain non-taxable amounts such as exempt amounts from time-savings accounts or income that is taxed by a foreign state.

It is therefore logical that the RFR includes, in addition to taxable income, tax-exempt overtime which really increases the employee's income.

Before the reform of the tax exemption for overtime, they were already taken into account.

The tax exemption therefore had, by itself, no effect on the RFR of your reader ”.

In conclusion, the minister refutes any “perverse effect”. “The applicable rules are thus balanced and fair: they encourage more work by substantially reducing the level of income tax and ensure that aid, particularly social aid, is granted taking into account real resources. "

Source: leparis

All business articles on 2021-04-30

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