FinCEN Files: Investigation into Dirty Money Transfers from Major Global Banks

At least $ 2 trillion in suspicious transactions were carried out between 2000 and 2017 by several major global banks. This is what an investigation by the International Consortium of Investigative Journalists, made up of 400 journalists from the media in 88 countries, including the investigation units of Radio France and the newspaper Le Monde, reveals.
For their investigation, ICIJ journalists were able to obtain "suspicious activity reports". These are top-secret documents that US bank internal compliance officials send to US financial intelligence agencies when they detect questionable money transfers.

According to these documents, 2,000 billion dollars in suspicious transactions may have been carried out. It is dirty money linked to drugs, corruption, organized crime and terrorism.

Large banks are singled out like JP Morgan, Deutsche Bank, Bank of New York Mellon or HSBC. They ensure, however, that they make significant efforts to combat financial crime an…

Retirement in France : Tips to limit the tax on your premium

Receiving severance pay when you retire can blow your taxes. But several solutions can significantly soften the tax bill. If you retire this year, you will likely receive severance pay. A tax premium, unless your retirement is at the initiative of your employer (minimum 70 years). It is often a fairly plump sum and, past the satisfaction of receiving this little gem, must ask the question of the taxation of this amount, which increases your taxable income. Until 2019, retirement bonuses could benefit from the averaging mechanism, an advantageous system since it makes it possible to smooth the tax increase by spreading the declaration of the amount received over four years. But this possibility has been removed by the finance law for 2020 and neo-retirees, if they do not act, could see a large part of their premium eaten up by income tax. If you are concerned, do not panic, you are not disarmed either.

Retirement in France : Tips to limit the tax on your premium

First reflex to have to limit the tax note: plan to retire as early as possible in the calendar year. The tax being calculated over a full year, leaving on January 1 for example allows you to add your premium to reduced income since your retirement pension will logically be lower than your professional income. The overall taxation of your premium will logically be reduced with a potentially lower marginal tax bracket. Please note, this early departure may have an impact on the calculation of your retirement, so it is necessary to measure the possible impact.

You can then use the quotient system to lower your taxation. This mechanism consists in calculating the tax supplement induced by an exceptional income on a quarter of the amount in question, this supplement then being multiplied by 4 to be added to the tax. What is the point ? Limit the tax impact by reducing the escalation of income tax. To understand the impact of the quotient, we asked Florent Belon, head of wealth engineering at Olifan Group, to carry out a simulation on the basis of a married couple with a taxable income of 60,000 euros and one of whom members retire in 2020, pocketing a bonus of 16,000 euros. Without resorting to the quotient, the 2020 income tax (IR) climbs to 8,808 euros, against 4,742 euros if the premium had not been received. By calculating the IR on 64,000 euros (60,000 + 16,000 / 4), it reaches 5,568 euros, or a tax supplement of 826 euros (5,568 - 4,742). It is this same tax supplement multiplied by 4 that must be added to the tax calculated without the premium to obtain the IR from the quotient system, ie 826 x 4 + 4,742 = 8,046 euros. The gain obtained with the quotient then appears at 762 euros (8,808 - 8,046).

How to take concrete advantage of the quotient? In your income tax return, simply indicate the amount of compensation in box 0XX of the appendix 2042C declaration while making sure to subtract this sum from the pre-filled income in your declaration in boxes 1AJ and 1BJ of the basic declaration (Cerfa 2042).

The advantage of the quotient system cannot be denied, but it is possible to do much better by coupling it with the tax deduction granted by retirement savings. A faculty allowed for employees, "with the popular retirement savings plan (Perp) and the retirement savings plan (PER)", details Florent Belon.

Within the limit of 10% of personal professional income in the previous year (2019 for a payment in 2020) and a maximum of 32,419.20 euros in 2020 (minimum of 4,052 euros if more than 10% of income), it is possible deduct the amounts paid on a Perp or PER from taxable income. Florent Belon adds a major clarification: “This retirement savings ceiling can be shared for a married or PACS couple. More generally, it can be increased by the unused balance of the last three years.”

Keeping the example of the married couple, one of whose members retires, if the latter pays 5,000 euros into their plan, the tax calculated on ordinary income will be reduced to 4,042 euros, against 4,742 euros without deduction. By applying the quotient mechanism, it results in a tax of 4,546 euros, or an additional 504 euros (4,546 - 4,042). To obtain the final tax, you have to multiply this supplement by 4 again and add it to the income tax, i.e. 4 x 504 + 4,042 euros = 6,058 euros. The gain then amounts to 1,988 euros (8,046 - 6,058) compared to the IR calculated with the quotient alone and to… 2,750 euros (8,808 - 6,058) compared to the income tax obtained without quotient or deduction on a retirement savings plan.

More generally, receiving a retirement bonus of 16,000 euros induces in our example a tax supplement limited to 1,316 euros (6,058 - 4,742), against 4,066 euros (8,808 - 4,742) normally. Translation: the tax saving reaches 67.6% ((4.066 - 1.316) / 4.066)! According to Olifan Group, the tax benefit can climb to 87% if the neo-retiree is located in the marginal tax bracket (TMI) of 11%, 74% for a TMI of 30% and 66% for a TMI of 41 %.