Retirement tax 2023: calculation, declaration…
Retired, do you have to declare your pension? If so, from what amount? We answer you.
Departments ranging from 01 to 19 have until Thursday, May 25 to complete and send their 2023 tax return on 2022 income. For households wishing to send their declaration in paper format, you are already late since the deadline was May 22!
For homes located in departments ranging from 20 to 54, the deadline is June 1. Those living in departments numbered 55 and beyond have until June 8. On PleineVie.fryou have been able to discover a range of articles on taxes and retirement: thetax allowanceTHE boxes to remember to tick or how to change or lower the withholding tax rate. Today we answer another question around the tax return.
What is the taxable amount of a 2023 retirement pension?
Pensions are, like income from assets, taxable. Since January 1, 2019 and the introduction of withholding tax, retirement pensions are subject to withholding tax. The amount you receive is therefore an amount net of withholding tax.
Retirement pensions benefit from a flat-rate allowance of 10% capped at €4,123 (for 2022 income) for all members of the tax household. The amounts are pre-filled on the tax return (box 1AS or 1BS). You just need to check these amounts. You must declare the pensions and pensions dependents or related persons because this income is never pre-filled.
Pension tax: what you absolutely must declare
- Sums paid by pension schemes, basic and supplementary, by special schemes or by the State
- Retirement benefits paid in the form of capital.
These amounts must include the following amounts:
- Supplements for family expenses
- Bonuses for war campaign (increase in the pension granted to veterans)
- Additional allowances paid by pension schemes (e.g. education allowance, death allowance, etc.).
You must also declare the following amounts:
- Allowances paid to certain veterans
- Widowhood allowances
- Life annuities paid within the framework a retirement savings plan (PERP), the PREFON scheme or a Madelin contract or a compulsory supplementary company pension scheme (Article 83) as well as annuities from a compulsory retirement savings plan (PERO), an individual retirement savings plan (PERIN) or a collective company retirement savings plan (PERECO), other than those corresponding to payments from employee savings or voluntary payments subject to an option for their non-deduction
- Life annuities paid free of charge received under a deed of gift or a will.
If you have received retirement benefits in the form of a lump sum (in particular the single lump sum payment replacing a small pension), you can request that this income be taxed according to the quotient system or opt for flat tax at the rate of 7 .5% on your tax return, remember the tax portal.
Option for 7.5% flat tax (option is possible when the following conditions are met):
- the capital payment is not split
- contributions paid during the accrual phase, including where applicable by the employer, were deductible from taxable income.
The 7.5% levy is calculated on the amount of capital minus a 10% allowance.
If you opt for taxation at 7.5%, declare the amount before deduction of contributions or contributions deducted from the pension, box 1AT or BT. You will then have to modify the pre-filled amount in box 1AS or 1BS.
Option for the quotient system
If you choose the quotient system, the tax relating to the exceptional income (in this case, the retirement pension paid in capital) is paid in one go. However, you attenuate the progressiveness tax, that is to say taxation in scale brackets whose rate is higher than that usually borne. The quotient system also makes it possible to reduce the reference taxable income (RFR), which can be taken into account for the council tax calculation or for the allocation of certain social benefits.
The quotient system consists of adding a quarter of the exceptional income to the usual income, then multiplying the corresponding tax supplement by four. To do this, you must indicate the amount of your pension paid in capital in box 0XX of your 2042C tax return and not include it in the amount of pensions declared in box 1AS or 1BS.