Changes to PASRAU in 2020 : Let’s talk!

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Changes to PASRAU in 2020 : Let’s talk!

The main purpose of the PASRAU rules is to provide for French income tax withholding for sources of income included on a list established in 2019. Those withholdings are then transferred to the DGFIP. The new standard for 2020 includes three major innovations:

  • Declaring new types of income: in particular, income from ‘Rentes Viagères à Titre Onéreux (RVTO)’ life annuities
  • Classifying income paid by type
  • Identifying the ‘right’ (insurance policy) that is responsible for the payment

As a result, the NEORAU 2020 standard is more complex:

  • the scope of payments for PASRAU 2020 has been expanded
  • there is more information that must be shared, particularly with additional data on:
    • the ‘right’ (insurance policy)
    • the class of income
    • details of the gross and net amounts, taxable and non-taxable contributions, etc.

Given the expansion of the scope of declarations, the new PASRAU 2020 declaration will, indeed, concern providers who already had to file declarations under PASRAU 2019, but also those who did not previously have to do so but who pay taxable sums under RVTO life annuities according to Article 158-6 of the French General Tax Code.

In particular, this tax rule covers annuities paid under life insurance policies purchased for oneself and annuities paid as compensation to victims of accidents when they are not exempt from income taxes as provided for in Article 81-9°bis of the French General Tax Code (see BOI RSA-PENS-10-40).

In regards to the time frame for implementation, the standard will be obligatory starting from the ‘principal declaration month’ of January 2020. In regards to just RVTO life annuities, the Direction Générale des Finances Publiques may agree to allow providers who are not ready at the start of 2020 to pay balancing sums as part of the PASRAU declaration for December 2020, or at the latest in the first quarter of 2021.

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