This is the great novelty of the 2022 tax return, which the tax authorities kicked off this Thursday, April 7. To cope with fuel price inflation, the government announced last January the revaluation of the mileage scale by 10% for the taxation of income 2021. A measure benefiting, according to Bercy, the “heart of the middle class”.
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In practice, this device allows any taxpayer who uses his car for professional reasons to deduct part of his fuel expenses as professional expenses. At the time of his tax declaration, the latter has the choice between the flat-rate deduction of 10% applied to his annual net taxable income – this option is applied by default by the tax authorities – or the deduction of actual costs, by calculating mileage costs. The latter being calculated according to the distance traveled and the fiscal power of the car (the number of fiscal horses).
Unrecognized option
But according to the tax authorities, this option remains relatively unknown to the French, even though it would be particularly interesting, especially for high-rollers on a low salary. Example with Louis, a 30-year-old bachelor, driving 50 kilometers a day in a 5 CV combustion engine, and declaring a taxable income of €28,000 per year. According to the DGFIP, the classic deduction of professional expenses of 10% would allow Louis to deduct €2,800 from his taxable income, whereas with actual expenses, he could deduct €4,880. Enough to make him go from the 30 to 11% tax bracket…
On the occasion of the annual press conference on the launch of the income tax campaign, Jérôme Fournel, the Director General of Public Finances insisted on the interest for the French to seize this advantageous device. “And for good reason, even in the event that a taxpayer opts for the actual costs, while the flat-rate deduction would be more advantageous to him, the latter would be applied to him automatically”he specified.
This could in particular be the case of a taxpayer driving 50 kilometers per day but whose net taxable remuneration would be greater than €50,000 per year.
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Currently, 4.3 million households declare their actual costs, of which 2.5 million are actually taxed. The tax authorities specify that from 2023, the government plans to introduce an automatic indexation of the kilometer scale, according to fuel prices, in order to better take into account the evolution of the cost of ownership of a vehicle.