French General Tax Code
In forceI. - The amount of the levy referred to in article 204 A may be adjusted upwards or downwards at the taxpayer's request.
However, when a change in the situation mentioned in 1 of article 204 I has occurred, no application for modulation may be made until this change in situation has been declared.
II. - The taxpayer may freely choose to increase the rate mentioned in articles 204 H and 204 I or the base for the advance payment mentioned in article 204 G which are applicable to it.
The rate of the levy or the base of the advance payment adjusted upwards by the taxpayer applies no later than the third month following that of the request and until 31 December of the year or, if the adjusted rate or amount of the advance payment resulting from his request is lower, respectively, to the rate or amount of the advance payment determined by the tax authorities on the basis of income tax and income for the previous year pursuant to I of article 204 H, until the date from which the latter rates or amount of advance payment apply.
III. - 1. The downward modulation of the levy is only possible if the amount of the levy estimated by the taxpayer in respect of his situation and income for the current year is more than 5% less than the amount of the levy he would bear in the absence of this modulation.
2. The taxpayer who wishes to have his withholding tax adjusted declares, on his own responsibility, his situation and the estimate of all his income for the current year. Where this is not available to the tax authorities, the taxpayer declares his situation and all his income for the previous year.
3. The tax administration calculates the levy resulting from the declaration provided for in 2 of this III by applying to the amount of estimated income, determined under the conditions provided for in Article 204 F and article 204 G, with the exception of 7° of 2 of the same article 204 G, a rate calculated in accordance with the terms of 1 of I of article 204 H, the income taken into account for the calculation of this rate being that resulting from the declaration mentioned in 2 of this III and the income tax relating to it being that resulting from the application to this income of the rules provided for in 1 to 4 of I of article 197 or, where applicable, in article 197 A in force on the date of the request.
In the case provided for in 2° of 5 of this III, the estimate referred to in the first paragraph of this 3 is understood to be that carried out jointly by the two members of the couple.
In the case provided for in 3° of 5 of this III, the estimate mentioned in the first paragraph of this 3 is understood to be that made by the surviving spouse or partner in respect of the period after the death.
In the case provided for in 4° of 5 of this III, the estimate mentioned in the first paragraph of this 3 is understood to be that made by the former spouse or partner in respect of the entire year.
4. The tax administration calculates the amount of the levy that the taxpayer would bear in the absence of this modulation according to the following procedures:
a) The amount of withholding tax taken into account is calculated by applying to the amount of the base mentioned in article 204 F declared by the taxpayer in respect of the current year two thirds of the rate that applies between 1 January and 31 August and one third of the rate that applies between 1 September and 31 December, in application of 2 of I of article 204 H, of III of the same article 204 H by retaining the rate on an annual basis in application of d of 1 of III of the said article 204 H or, where the taxpayer has declared during the last or penultimate year a change of situation mentioned in article 204 I, in application of the same article 204 I ;
b) The amount of the advance payment taken into account is the amount of the payments made in application of article 1663 C on the date of the application for modulation, to which are added the payments which would be made, in the absence of modulation, after this date by application of articles 204 G and 204 I, under the conditions provided for in the same article 1663 C.
5. By way of derogation from 4 of this III:
1° Where the levy for which the taxpayer requests modulation follows a previous modulation carried out during the same year:
a) The amount of withholding tax taken into account is calculated by applying to the amount of the base referred to in article 204 F declared by the taxpayer in respect of the current year the average pro rata temporis of the rate resulting from the previous modulation as well as the other rates that applied, where applicable, before the date of implementation of this rate ;
b) The amount of the advance payment taken into account is the amount of payments made in application of article 1663 C on the date of the new application for modulation, plus any payments made after that date in application of the previous modulation ;
2° Where the levy for which the members of a couple are requesting modulation is the result of a change in situation provided for in 1° of 1 of article 204 I during the year and the rate provided for in 1° of 3 of the same article 204 I applies on the date of the request for modulation:
a) The amount of withholding tax taken into account is calculated by applying, for each member of the couple, to the amount of the base mentioned in article 204 F that they declared in respect of the current year the average pro rata temporis of the rate resulting from the application of 1° of 3 of article 204 I as well as the other rates that applied, where applicable, before the date of implementation of this rate;
b) The amount of the advance payment taken into account is the amount of the payments made by each member of the couple in application of article 1663 C on the date of the request for modulation, plus the payments that would be made for each member of the couple after that date, in the absence of modulation, in application of 1° of 3 of article 204 I ;
3° Where the levy for which the surviving spouse or partner is requesting modulation is the result of a change in circumstances as provided for in 2° of 1 of article 204 I during the year:
a) The amount of withholding tax taken into account is calculated by applying to the amount of the base referred to in article 204 F declared by the surviving spouse or partner from the date of death until 31 December the average pro rata temporis of the rate resulting from the application of 2° of 3 of article 204 I as well as the other rates that applied between the date of death and the date of implementation of this rate ;
b) The amount of the advance payment taken into account is the amount of the payments relating to the income or profits disposed of by the surviving spouse or partner, paid in application of article 1663 C between the date of death and the date of the application for modulation, to which are added the payments of the same nature which would be made after this date, in the absence of modulation, in application of 2° of 3 of article 204 I ;
4° Where the deduction for which the former spouse or partner is requesting modulation is the result of a change in situation as provided for in 3° of 1 of article 204 I during the year:
a) The amount of withholding tax taken into account is calculated by applying to the amount of the base mentioned in article 204 F declared by the former spouse or partner the average pro rata temporis of the rate resulting from the application of 3° of 3 of article 204 I as well as the other rates that have applied since 1st January;
b) The amount of the advance payment taken into account is the amount of the payments relating to the income or profits disposed of by the former spouse or partner, paid in application of article 1663 C from 1st January to the date of the application for modulation, to which are added the payments of the same nature which would be made after this date, in the absence of modulation, in application of 3° of 3 of article 204 I ;
5° Where the levy for which the taxpayer requests modulation is the result of a change in situation as provided for in 4° of 1 of article 204 I during the year:
a) The amount of withholding tax taken into account is calculated by applying to the amount of the base referred to in article 204 F declared by the taxpayer in respect of the current year the average pro rata temporis of the rate resulting from the application of 4° of 3 of article 204 I as well as the other rates that applied, where applicable, before the date of implementation of this rate ;
b) The amount of the advance payment taken into account is the amount of the payments made in application of article 1663 C on the date of the request for modulation, plus the payments that would be made after that date, in the absence of modulation, in application of 4° of 3 of article 204 I.
6. When the taxpayer decides to modulate his levy downwards:
1° The modulated rate calculated under the conditions provided for in 3 of this III applies no later than the third month following that of the decision to modulate and until 31 December of the year;
2° The amount of the advance payment calculated under the conditions provided for in 3 of this III is reduced by the amount of payments already made, without being able to give rise to a refund, and applies until 31 December of the year.
The advance payment, together with the calculations that determined it, provided for in 2° of 2 of article 204 A is communicated to the taxpayer by the tax authorities.
