economical
ecological
The Truth about Tax Credits
Issued April 2009
Meet Frank
Hi and welcome to my Newsletter. Each edition contains information I believe is important for you and our planet. This month Credit d’Impot – Tax Credits. We trust you find it “ribetting”.
All about Credit d’Impot
Tax Credits in France - Credit’ d’Impot. France has well publicised system of tax credits which apply to certain products. These products are mainly those considered ‘renewable energy’ systems such as solar hot water systems, or central heating which includes log and pellet boilers, wood burning stoves and some heat pumps. The purpose of the tax credit scheme is to provide a financial incentive for buyers to encourage them to invest in environmentally friendly technologies, which is good for everyone and of course the planet. In essence, if you buy a product approved for tax credits (more later) then the tax office will reimburse a percentage of the product cost, on the proviso the product is supplied and installed by the same company (vitally important*), and the company must of course be registered to install such equipment. For example, you purchase a wood burning central heating boiler which costs say 7000 Euros plus installation. The tax office will reimburse you 40% of this, i.e. 2800 Euros in the following tax year. If you don’t pay this much tax, or in fact pay none, then they will send you a cheque – yes really !! Please note, the credit applies to product cost only and not labour. Personal qualification criteria The main requirement is that you must be fiscally resident in France, and if your principal residence is in France then in theory you are fiscally resident from day one. Until recently the scheme only applied to principal residence but has now been extended to include some rental properties.
TVA Rates
There are currently two rates of TVA – 19.6% and 5.5%. To benefit from a reduced rate of TVA product/s have to be professionally installed. There are a few other requirements such as the property being more than two years old, that the work is replacement / refurbishment etc etc but the above point re ‘professional installation’ is the one to watch. The main French TVA form is a very simple one which is a pleasant surprise.
Ecopower, Le Châtenet, 24160 Anlhiac, France.
Tél: 0033 (0) 553 62 31 35
Web: www.ecopower.eu.com
Email: info@ecopower.eu.com
Products approved for tax credits The products have to achieve a certain level of efficiency, i.e. say 85% efficient, and meet certain standards. For example, for a solar hot water system has to be either CSTB approved, Solar Keymarked or approved to a Pan European standard such as EN12975 etc. How much tax credit and for how long? Up until February 2009 you could for example receive up to a 50% reimbursement against many qualifying products, however this has recently been reduced to 40% for some items. It is also very important to note that the tax credit does not necessarily apply to all of the products that might be used. For example, for solar hot water systems the tax credit applies to what is deemed the ‘renewable energy part of the system’. Therefore, in this instance it only applies to the solar panel/s and not for example the pipework, pump etc. The amount of tax credit is limited to 8000 Euros for a single person and is 16000 Euros for a couple. The scheme was due to finish at the end of 2009 but has been extended to 31st December 2012. That said, the percentage amount of tax credit is being reduced each year so in 2010 it is no longer 40% for boilers but reduces to 25% and so on – so don’t delay. Who is responsible for complying with the tax regulations? As the person submitting the tax return you are responsible. If you claim tax credits the ‘tax office’ will not necessarily check you qualify. This shouldn’t really be a problem but read on – some details have been removed to protect the identities of customer and supplier.
Caveat emptor - Buyer Beware* We bought our xxx in 2006 from ABC and received the 50% credit d'impot. After receiving the rebate we had not thought about it again. Anyway, in February this year we received a letter from the tax office stating that as the xxx wasn't installed by the company who supplied it and we have to hand back the rebate plus interest!! They're not claiming it's fraud but they want the rebate back. Obviously it's a shock. What's most annoying is ABC should have made this clear to us this when we bought it. Their 50% rebate stickers are extremely misleading...my partner went in to the store to point this out and they uselessly said 'c'est noté'. So a word of warning - if you've not bought yet, it must be bought from and installed by the same company. If you didn't and you had a rebate I'd make sure you put a bit of money aside just in case your tax form gets checked too. Who'd have thought they still went over these things years after! Our thanks to Karen for allowing us to print her unfortunate experience.
E
Frank Comments
It’s an unfortunate fact of life that the tax credit scheme has been and is being badly misrepresented and abused by numerous companies both big and small. The company referred to above is a major multi national so don’t assume just because they’re big they’re right. Despite the fact that legally it is your responsibility to ensure you are not making any false tax claims (unwittingly or otherwise), which could be considered as fraudulent, the supplier has a moral obligation to give you accurate advice. If they are not prepared to help then maybe they are not the company for you? Do try and take advantage of these schemes – there are huge financial benefits there for the asking and of course it’s money back from the taxman which is a bonus in itself – but do your homework and then you can be secure in the knowledge that you have complied. Best regards, Email me: frank@ecopower.eu.com
Frank.
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Ecopower, Le Châtenet, 24160 Anlhiac, France. Tél: 0033 (0) 553 62 31 35 Web: www.ecopower.eu.com Email: info@ecopower.eu.com